A pattern I keep seeing when reviewing crypto strategies:
They don’t slowly decay.
They snap.
What usually breaks them isn’t bad logic, but a regime shift:
- Low → high volatility
- Trending → choppy
- Risk-on → risk-off
A strategy that looks “rock solid” for months can give back most of its edge in a handful of trades when the regime flips.
A few things that helped me spot this earlier:
- Separating performance by volatility buckets
- Looking at where drawdowns cluster, not just how big they are
- Stress-testing assumptions instead of optimizing parameters
Biggest takeaway for me:
If a strategy only works in one market environment, it’s not robust — it’s conditional.
Curious how others here deal with this:
Do you adapt strategies to regimes, rotate them, or just accept drawdowns as the cost of edge?
Why most strategies fail.
byu/Entire_Beautiful_438 inCryptoMarkets
Posted by Entire_Beautiful_438
1 Comment
I usually use same strategy as with stock market:
Rule 1 invest what you can afford to loose
Rule 2 diversify, do not put everything on single underlying
Rule 3 do not panic during difficult downturn or turmoil periods
Rule 4 invest regularly not go all in on a specific day
Rule 5 be patient and play it over the long run (decade or above)
Rule 6 carefully select your underlying based on revenue, growth, future outlook and management team strategy