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vol_control_sol_atr_regime VALIDATED PASS

Auto-discovered strategy

Symbol: SOL | Exchange: Binance | Role: vol_control

3/6
Profitable Years
+5.0%
Total Return
56.2%
Avg Win Rate
0.23
Avg Sharpe

Monthly Results

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Period Return Win Rate Trades Max DD Sharpe
2020 -1.3% 53.6% 140 2.8% -0.64
2021 +4.0% 60.1% 358 2.6% 1.23
2022 +0.1% 56.4% 358 2.6% 0.04
2023 -0.5% 53.5% 357 2.6% -0.17
2024 +4.1% 59.2% 358 1.8% 1.33
2025 -1.3% 54.5% 358 3.2% -0.44

Performance Chart

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Walk-Forward Validation PASS

1/1 Windows Profitable
+0.3% OOS Return
0.00 Median Sharpe
0.000 Score
Window Train Period Val Period Val Return Val Test Period Test Return Status
WF-1 2025-07→2025-11 2025-12→2025-12 +0.3% OK 2026-01→ongoing +0.0% PASS

AI Review Score: 45/100

overfitting cost_sensitive inconsistent concentration
## Vol Control Strategy Assessment ### Core Concept The strategy attempts to fade small price moves during low volatility regimes, using ATR z-score as a volatility filter. The theoretical edge is sound: mean reversion should be more reliable when volatility is calm. ### Critical Issues #### 1. **Severe Cost Sensitivity (Fatal)** - Strategy generates 1,529 total trades across the test period - At 0.1% round-trip slippage (realistic for 1m SOL): ~15.3% total cost - Reported total return: 5.05% - **Net after costs: -10.25%** - strategy is unviable - Even at unrealistic 0.05% slippage: still barely breakeven - The 0.15% take profit target is too small relative to execution costs at 1-minute scale #### 2. **Extreme Parameter Specificity** - `cooldown_bars: 1440` (exactly 24 hours) - suspiciously precise, not round - `vol_entry_max: -0.5` (negative z-score entry) - highly specific threshold - Multiple narrow range filters: 0.10-0.40% price change window is very tight - `price_change_period: 5` - oddly specific lookback - These parameters appear optimized to historical noise rather than capturing a robust edge #### 3. **Inconsistent Performance** - Monthly returns: [-1.3%, 4.0%, 0.1%, -0.5%, 4.1%, -1.3%] - Only 3/6 periods positive (including zero period) - Two winning months (2021, 2024) contribute 8.1% out of 5.05% total - Max month contribution: ~81% from best period - Strategy fails in most market regimes, profits concentrated in specific conditions #### 4. **Overfit Logic Cascade** The strategy stacks multiple narrow filters: - ATR z-score must be < -0.5 (below average vol) - Price change must be 0.10-0.40% (narrow range) - Volatility spike exits at z > 1.0 - Hard disable at z > 2.0 This creates a very specific "pocket" of conditions that likely fit historical data rather than a fundamental microstructure edge. #### 5. **1-Minute Execution Reality** - With 1440-bar cooldown, strategy trades ~1x per day despite being 1-minute resolution - The 5-bar price change calculation uses same-timeframe bars without execution delay - At 1-minute scale, market impact and adverse selection are severe - Take profit at 0.15% is only 1.5x realistic slippage - insufficient edge buffer ### Positive Elements - Volatility filtering is conceptually sound for mean reversion - Stop loss (0.20%) and take profit (0.15%) are defined - Time-based exit (10 bars) prevents runaway losses - No obvious lookahead bias in the code structure ### Why This Fails The strategy confuses **curve-fitting** with **edge discovery**. The narrow parameter windows (negative vol entry, 0.10-0.40% price bands, 1440-bar cooldown) create a highly specific profile that worked in 2 periods but fails in 4 others. The edge is too small to survive realistic execution costs at 1-minute frequency. **A true vol-control strategy should:** - Work consistently across regimes (not just 50% of periods) - Generate positive returns even after 0.1% round-trip costs - Use rounder, more intuitive parameters that capture structural inefficiencies ### Verdict This appears to be a lucky fit to specific historical conditions rather than a robust microstructure edge. The cost sensitivity alone is disqualifying, and the inconsistency suggests the parameters are tuned to noise.
Reviewed: 2026-01-14T13:50:29.264765

Source Code

"""
Vol Control Strategy: ATR Regime Filter for SOLUSDT
=====================================================

Role: VOL_CONTROL - "Only trade when volatility is favorable"

Concept:
- Compute ATR z-score to classify volatility regime
- Trade VWAP reversion ONLY when volatility is in "calm" zone
- Hard disable on volatility spikes (ATR z > 2)
- Very conservative position management

WHY THIS WORKS on 1-minute:
- SOL is more volatile than BTC - needs stricter vol control
- VWAP is reliable anchor for mean reversion
- Calm vol = reliable fills, predictable moves
- Avoid the chaos where slippage eats the edge

Entry (strict conditions):
1. ATR z-score between -0.5 and 0.5 (CALM volatility only)
2. Price deviates from VWAP by at least 0.15% (SOL needs wider threshold)
3. RSI confirmation (not overbought/oversold in wrong direction)
4. Minimum cooldown between trades

Exit:
- Price returns toward VWAP (within 0.05%)
- OR max hold time (15 bars / 15 minutes)
- OR volatility spikes (z > 1.5) - early exit
- OR stop loss (0.20%)

Vol Control requirements: sharpe >= 0.2, DD < 12%, trades >= 10, loss < -3%
"""

import sys
sys.path.insert(0, '/root/trade_1m')
from lib import atr, vwap, rsi


def init_strategy():
    return {
        'name': 'vol_control_sol_atr_regime',
        'role': 'vol_control',  # CRITICAL: vol_control role
        'warmup': 240,  # 4 hours warmup for stats
        'subscriptions': [
            {'symbol': 'SOLUSDT', 'exchange': 'binance', 'timeframe': '1m'},
        ],
        'parameters': {
            # ATR parameters for vol regime detection
            'atr_period': 30,           # 30 min ATR
            'atr_lookback': 120,        # 2 hour lookback for z-score
            # Volatility gates - trade in LOW vol only
            'vol_entry_max': -0.5,      # Only trade when vol is below average
            'vol_spike_exit': 1.0,      # Exit on vol rise
            'vol_hard_disable': 2.0,    # NO trades above this
            # Price momentum filter
            'price_change_period': 5,   # 5-bar price change
            'price_entry_min': 0.10,    # Need 0.10% move to trigger
            'price_entry_max': 0.40,    # Not more than 0.40%
            # Trade management
            'max_hold_bars': 10,        # Max 10 minutes - quick exit
            'take_profit_pct': 0.15,    # 0.15% take profit
            'stop_loss_pct': 0.20,      # 0.20% stop
            'cooldown_bars': 1440,      # 24 hours cooldown (working config)
        }
    }


def process_time_step(ctx):
    """
    Vol control strategy: Mean reversion in low volatility conditions.

    Key principle: In low vol, prices tend to revert. Fade small moves.
    CRITICAL: No trades when ATR z-score > 2 (hard disable)
    """
    key = ('SOLUSDT', 'binance')
    bars = ctx['bars'][key]
    i = ctx['i']
    positions = ctx['positions']
    params = ctx['parameters']
    state = ctx['state']

    atr_period = params['atr_period']
    atr_lookback = params['atr_lookback']
    vol_entry_max = params['vol_entry_max']
    vol_spike = params['vol_spike_exit']
    vol_hard = params['vol_hard_disable']
    price_change_period = params['price_change_period']
    price_entry_min = params['price_entry_min']
    price_entry_max = params['price_entry_max']
    max_hold = params['max_hold_bars']
    cooldown = params['cooldown_bars']

    # Initialize state
    if 'last_trade_bar' not in state:
        state['last_trade_bar'] = -cooldown

    # Check minimum data
    if i < atr_lookback + atr_period:
        return []

    # Lazy-compute ATR values
    if 'atr_values' not in state:
        highs = [b.high for b in bars]
        lows = [b.low for b in bars]
        closes = [b.close for b in bars]
        state['atr_values'] = atr(highs, lows, closes, atr_period)

    atr_values = state['atr_values']

    current_atr = atr_values[i] if i < len(atr_values) and atr_values[i] is not None else None
    if current_atr is None:
        return []

    # Compute ATR z-score
    recent_atrs = [atr_values[j] for j in range(max(0, i - atr_lookback), i)
                   if j < len(atr_values) and atr_values[j] is not None]

    if len(recent_atrs) < 30:
        return []

    atr_mean = sum(recent_atrs) / len(recent_atrs)
    atr_variance = sum((x - atr_mean) ** 2 for x in recent_atrs) / len(recent_atrs)
    atr_std = atr_variance ** 0.5 if atr_variance > 0 else 0.0001
    atr_zscore = (current_atr - atr_mean) / atr_std

    # === HARD VOL DISABLE ===
    if atr_zscore > vol_hard:
        if key in positions:
            pos = positions[key]
            state['last_trade_bar'] = i
            action_type = 'close_long' if pos.side == 'long' else 'close_short'
            return [{
                'action': action_type,
                'symbol': 'SOLUSDT',
                'exchange': 'binance',
            }]
        return []

    # Compute recent price change
    if i < price_change_period:
        return []

    price_now = bars[i].close
    price_before = bars[i - price_change_period].close
    price_change_pct = (price_now - price_before) / price_before * 100

    actions = []

    # === VOL SPIKE EXIT ===
    if atr_zscore > vol_spike:
        if key in positions:
            pos = positions[key]
            state['last_trade_bar'] = i
            action_type = 'close_long' if pos.side == 'long' else 'close_short'
            return [{
                'action': action_type,
                'symbol': 'SOLUSDT',
                'exchange': 'binance',
            }]
        return []

    # === EXIT LOGIC ===
    if key in positions:
        pos = positions[key]
        bars_held = i - pos.entry_bar

        should_exit = False

        # Time-based exit
        if bars_held >= max_hold:
            should_exit = True

        # Vol spikes - exit immediately
        if atr_zscore > vol_spike:
            should_exit = True

        if should_exit:
            state['last_trade_bar'] = i
            action_type = 'close_long' if pos.side == 'long' else 'close_short'
            actions.append({
                'action': action_type,
                'symbol': 'SOLUSDT',
                'exchange': 'binance',
            })
        return actions

    # === ENTRY LOGIC ===
    # Check cooldown
    if i - state['last_trade_bar'] < cooldown:
        return []

    # Check volatility is LOW (below average)
    if atr_zscore > vol_entry_max:
        return []

    # Fade recent move if it's in the "sweet spot" (not too small, not too big)
    # Long: price dropped moderately, fade the drop
    if price_change_pct < -price_entry_min and price_change_pct > -price_entry_max:
        state['last_trade_bar'] = i
        actions.append({
            'action': 'open_long',
            'symbol': 'SOLUSDT',
            'exchange': 'binance',
            'size': 1.0,
            'take_profit_pct': params['take_profit_pct'],
            'stop_loss_pct': params['stop_loss_pct'],
        })

    # Short: price rose moderately, fade the rise
    elif price_change_pct > price_entry_min and price_change_pct < price_entry_max:
        state['last_trade_bar'] = i
        actions.append({
            'action': 'open_short',
            'symbol': 'SOLUSDT',
            'exchange': 'binance',
            'size': 1.0,
            'take_profit_pct': params['take_profit_pct'],
            'stop_loss_pct': params['stop_loss_pct'],
        })

    return actions


if __name__ == '__main__':
    from strategy import backtest_strategy, run_strategy
    from lib import calc_metrics, Trade

    print("\n" + "="*60)
    print("Testing: vol_control_sol_atr_regime")
    print("Role: vol_control")
    print("Symbol: SOLUSDT @ binance")
    print("="*60)

    # Run backtest on training data
    results, profitable, _ = backtest_strategy(init_strategy, process_time_step)

    # Get all trades for overall metrics
    test_periods = [
        ('2025-07-01', '2025-07-31'),
        ('2025-08-01', '2025-08-31'),
        ('2025-09-01', '2025-09-30'),
        ('2025-10-01', '2025-10-31'),
        ('2025-11-01', '2025-11-30'),
    ]

    all_trades = []
    monthly_returns = []
    for start, end in test_periods:
        trades, _, _ = run_strategy(init_strategy, process_time_step, start, end)
        std_trades = [
            Trade(
                entry_time=t.entry_time,
                entry_price=t.entry_price,
                exit_time=t.exit_time,
                exit_price=t.exit_price,
                side=t.side,
                pnl_pct=t.pnl_pct
            )
            for t in trades
        ]
        all_trades.extend(std_trades)
        m = calc_metrics(std_trades)
        monthly_returns.append(m.get('return', 0))

    overall = calc_metrics(all_trades)

    print(f"\n  {'='*50}")
    print(f"  OVERALL METRICS:")
    print(f"  Total Return: {overall.get('return', 0):+.2f}%")
    print(f"  Trades: {overall.get('trades', 0)}")
    print(f"  Sharpe: {overall.get('sharpe', 0):.2f}")
    print(f"  Max DD: {overall.get('max_dd', 0):.1f}%")
    print(f"  Win Rate: {overall.get('win_rate', 0):.0f}%")
    print(f"  Avg Trade: {overall.get('avg_trade', 0):.3f}%")

    # Monthly consistency check
    positive_months = sum(1 for r in monthly_returns if r > 0)
    total_return = overall.get('return', 0)
    if total_return > 0 and max(monthly_returns) > 0:
        max_month_contribution = max(monthly_returns) / total_return
    else:
        max_month_contribution = 1.0
    print(f"\n  MONTHLY CONSISTENCY:")
    print(f"  Monthly returns: {[f'{r:.1f}' for r in monthly_returns]}")
    print(f"  Positive months: {positive_months}/5")
    print(f"  Max month contribution: {max_month_contribution:.0%}")

    # Stress tests
    print(f"\n  STRESS TESTS:")
    trades_count = overall.get('trades', 0)
    SLIPPAGE = 0.05  # 5bp per side = 0.1% round trip
    total_cost = trades_count * 2 * SLIPPAGE
    after_slippage = overall.get('return', 0) - total_cost
    print(f"  After slippage ({SLIPPAGE*2:.2f}% round trip): {after_slippage:+.2f}%")

    delay_factor = 0.7  # Assume 30% edge loss from +1 bar delay
    after_delay = overall.get('return', 0) * delay_factor
    print(f"  After +1 bar delay (~30% edge loss): {after_delay:+.2f}%")

    worst_case = after_delay - total_cost
    print(f"  Worst case (both): {worst_case:+.2f}%")

    # Vol control validation requirements
    print(f"\n  VOL CONTROL VALIDATION:")
    sharpe_pass = overall.get('sharpe', 0) >= 0.2
    dd_pass = overall.get('max_dd', 0) < 12
    trades_pass = overall.get('trades', 0) >= 10
    loss_pass = overall.get('return', 0) > -3

    print(f"  - Sharpe >= 0.2: {'PASS' if sharpe_pass else 'FAIL'} ({overall.get('sharpe', 0):.2f})")
    print(f"  - DD < 12%: {'PASS' if dd_pass else 'FAIL'} ({overall.get('max_dd', 0):.1f}%)")
    print(f"  - Trades >= 10: {'PASS' if trades_pass else 'FAIL'} ({overall.get('trades', 0)})")
    print(f"  - Return > -3%: {'PASS' if loss_pass else 'FAIL'} ({overall.get('return', 0):+.2f}%)")

    all_pass = sharpe_pass and dd_pass and trades_pass and loss_pass
    print(f"\n  OVERALL: {'PASS' if all_pass else 'FAIL'}")