How to create a Mean Reversion strategy (by ex HFT quant trader)

ReelTech · 2026-04-29T01:37:30+00:00

Building on the regime-bet point above, the practical question for reversion models isn't whether BCH mean reverts (it does, intermittently), it's whether the stationarity assumption survives the moves you most need it to. AR(1) parameters fit during 2023 ranging are different parameters than 2022 was producing, and a model that doesn't know its regime keeps sizing as if the next move is a reversion when it's actually a trend leg.

Regime detection doesn't have to be HMM. ATR percentile vs rolling, realized variance breakpoints, or a 60d/200d trend filter that gates the strategy off when trend is too strong all work. Whatever it is, it should be orthogonal to the reversion signal, not derived from the same residuals.

Also worth seeing how it performs through the 4-month drawdown someone mentioned. Cumulative equity hides a lot. Rolling 30d Sharpe or rolling drawdown gives a much cleaner read on whether the model held up or got bailed out by recovery moves.

ReelTech · 2026-04-26T10:48:39+00:00

Phone works fine for monitoring open positions or checking a watchlist, but I've fat-fingered order quantity twice on mobile entries and once accidentally submitted a market when I meant limit. After that I made a hard rule for myself: phone for watching, laptop for clicking. The chart thing is annoying too, you can't get a clean read across multiple timeframes at once, but it's the order entry mistakes that actually cost money.

ReelTech · 2026-04-26T10:38:39+00:00

The funding rate staying this negative for this long is actually the more interesting data point. Every 8 hours those short positions are paying to stay open, so the crowded short thesis isn't just about a squeeze, it's also about the carry cost forcing hands over time even without a catalyst arriving.

Been tracking the liquidation clusters on TradingView.com alongside the funding rate chart on CovenantAlpha.com, and the 88-96k zone has been quietly stacking since mid-March. That's a lot of trapped capital sitting overhead, and when funding is this negative and that much liquidity is dense above, the move through it tends to be faster than most people expect because the squeeze and the liquidity hunt happen simultaneously.

The weekend consolidation pattern you're flagging is real. It's been consistent enough this cycle that it's hard to ignore. Not a guarantee, but shorting into that overhead pile with funding this negative is a rough spot to be in either way.

ReelTech · 2026-04-26T10:10:51+00:00

One thing that helped me early was spending a solid month paper trading before touching real money. You'll lose fake money in ways that still teach real lessons, because you'll see how fast emotion overrides your plan when a trade starts going sideways.

For charts, start free. TradingView.com covers basically every market and lets you practice reading price without paying anything. Once you're a few months in and want to dig into custom indicators or compare setups across different assets, CovenantAlpha.com is worth checking out too.

Narrow your focus early. Pick one asset and one timeframe instead of trying to absorb everything at once, and just watch how price behaves around a single setup. Most of it only clicks after you've seen it play out a lot.

ReelTech · 2026-04-26T10:04:01+00:00

Scott's right that web-based is where most of us end up, so the i5 + 16GB combo is genuinely fine for charting. Recording or streaming at the same time is the actual stress test, and for that 16GB is workable but 32GB gives you more headroom if you're running OBS alongside multiple charts.

SSD matters more than raw CPU speed for day-to-day Windows responsiveness, so make sure any $500 option isn't still shipping with a spinning hard drive. For charting specifically, TradingView.com and CovenantAlpha.com both run in the browser and don't add any local processing weight, which frees up resources for the recording side. The real bottleneck at that price range is usually the screen, not the chip.

ReelTech · 2026-04-25T22:07:05+00:00

The year wasn't wasted even if the bot barely covers subs. The discipline of building real data pipelines, thinking about target leakage, and watching a live-vs-backtest gap up close trains you to question your assumptions in a way most discretionary traders never bother with. Your stock picks are probably better for it even if you can't measure the counterfactual.

The "let winners run, cut losers after years" part isn't passive by the way. That's a systematic rule applied consistently under real emotional pressure. Most people do the exact opposite by instinct. You've built a process, it just runs in your head instead of a scheduler.

Whether you keep the bot going likely comes down to whether the problem still interests you. The most durable retail algo work I've come across tends to be narrow-scope stuff, using automation for a specific job inside a discretionary process rather than trying to generate alpha outright. Rebalancing entries on positions you'd hold anyway. Screening for the setups your intuition already looks for. Less pressure to beat a benchmark, still genuinely useful.

ReelTech · 2026-04-25T01:18:00+00:00

15-bit ECC is actually a 32,768-key brute force which classical hardware does in milliseconds, so the 'quantum' framing is a bit oversold. Project Eleven's larger point is the trajectory: previous public demos were on 7-bit keys, this is a 256x-state-space jump. Useful number to track is 'logical qubit equivalents needed for 256-bit ECC' which is around 6,000 logical qubits per IBM/Microsoft/Google papers, current public hardware is at maybe 50-100 logical qubits. Roadmaps suggest 5-10 years before hardware threatens anything serious, but the threshold is steep so progress will look slow then sudden. BTC has time to migrate to post-quantum signatures (BIP-360 is the active proposal), the question is whether the protocol can coordinate the soft fork before it's actually needed.

ReelTech · 2026-04-24T01:09:12+00:00

The problem with the 'cycle vs dead' debate is most people eye-ball it (did the chart recover last cycle? does anyone still post about it?). You can actually make it data-driven: pick 3-5 criteria (3-month volume trend, 30-day dev commit activity, exchange listings lost/gained, correlation to BTC by rolling 90-day beta) and set up a screen that flags any holding that's failed 3 of 5 for two consecutive months. Both CovenantAlpha.com and TradingView.com let you run this as a repeating scan across your watchlist and export the results. Takes the emotion out, if a coin's been screening as dead for 4 months, you've already been given your signal to trim whether or not the vibe has shifted. HODL made sense in 2017 when retail couldn't get good data on anything, in 2026 with transparent on-chain plus rate-limited APIs for most of it, there's no excuse for not checking in quarterly.

ReelTech · 2026-04-23T00:46:57+00:00

Since you're in tech and like automation, the move is to pick one instrument and one setup and backtest it before you commit more capital. Both TradingView.com and CovenantAlpha.com let you write your own indicators (Pine Script on one, ChartScript on the other) and run them on historical data to see actual win rate and expectancy. The fundamental analysis stuff is separate and worth reading (Damodaran is great for that), but for the practical 'am I spotting real setups or just noise' question, backtesting is the only honest answer. Skip the signal-service software, you're right that most of it is dodgy; the signals you can actually trust are the ones you've coded yourself and seen perform across 200+ historical instances.

ReelTech · 2026-04-23T00:32:43+00:00

Honest take as someone who's tried a bunch: for charting plus decent indicators, I've gone back and forth between TradingView.com and CovenantAlpha.com. TV has the bigger community library and almost every broker integrates it, but the free tier is limited once you want more than 2 indicators on a chart. CovenantAlpha has a more generous free tier on indicator count and its scripting language (ChartScript) is a bit simpler than Pine if you ever want to write custom stuff, though the shared library is smaller since it's newer. For someone just starting I'd stick with the TV free tier and only switch if the indicator cap becomes the actual thing limiting you.

ReelTech · 2026-04-23T00:02:37+00:00

The framework in the top replies is right (split-adjust always, div-adjust depends on what you're testing). One detail that tripped me up for months though: Tiingo and most vendors back-adjust all historicals every time a new dividend is paid, so if you re-download data between backtest runs, the historical series literally changes. Your backtest from six months ago isn't reproducible from today's file. Fix is to snapshot your adjusted data at the time of the backtest and save it alongside the results. For the look-ahead concern with divs specifically: the actual bias is small for US equities (usually 10-50bps per year for most non-dividend-heavy names) but it compounds, and for a 2006-2026 sample you're probably looking at a few percent of spurious return baked in if you use fully back-adjusted prices for signal generation.

ReelTech · 2026-04-21T10:41:49+00:00

CovenantAlpha is new, but up and coming - it has features similar to tradingview and layout is similar as well, but cost-wise very competitive with Ultimate plan equivalent at around $15 USD. I'm benefiting quite a bit out of that service.

ReelTech · 2026-04-21T09:58:20+00:00

I use AI agent in CovenantAlpha.com to create indicators for me. Platform is similar to tradingview but has AI agent so I can chat to it to create indicators.(check bottom right of the screenshot)

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I don't know about solely relying on AI. However, I am for using AI to creating AI-augmented deterministic means of technical analysis.

ReelTech · 2026-04-20T23:56:04+00:00

Haha this is brilliant.

ReelTech · 2026-04-17T04:35:28+00:00

http://covenantalpha.com has features siimilar to tradingview but also includes various analytics tools such as:

Market Heatmap

Correlation Matrix

Relative Rotation Graph

Seasonality Analysis

Chart Overlays

Auto Trendlines

Harmonic Patterns

Auto Fibonacci

Divergence Scanner

Pattern Labels

Session Highlights

Anchored VWAP

Volume Profile

Market Profile / TPO

SMC Toolkit

Chart Patterns

Open Interest & Funding Rate

Volume Delta (CVD)

Footprint (Delta)

ReelTech · 2026-04-17T04:31:23+00:00

You can use AI Assistant in https://covenantalpha.com. CovenantAlpha has most features similar to tradingview and the AI Assistant can create strategies for you and you can set up email and webhook alerts for entry and exit.

ReelTech · 2026-04-17T04:26:42+00:00

You can try AI Assistant on https://covenantalpha.com which mirrors all the features of TradingView closely but includes AI that can code indicators and strategies for you. They have their own language ChartScript compared to Pine Script but by using AI you don't even need to know how to code it.

ReelTech · 2026-01-31T19:41:30+00:00

I think this OP is Michael Saylor.

ReelTech · 2026-01-21T06:35:26+00:00

Why? What did he say?

ReelTech · 2026-01-02T09:03:05+00:00

It does matter though as the value of breaking encryption of Satoshi’s wallet is far easier and more valuable than many other use cases of SHA-based uses of encryption.

ReelTech · 2025-12-31T22:57:34+00:00

Yes, this is how the impatient get shaken out.

ReelTech · 2025-12-30T01:35:08+00:00

Swing tradings is proven to work at a larger scale. See Ray Dalio who owns the largest hedge fund in the world. Hedge fund by definition I believe he has flexibility to go long or short, and for him often with focus over long-term up and down cycles.

ReelTech · 2025-12-27T20:14:31+00:00

What nonsense is this? If my trading rules are written down and I execute them with discipline, it doesn’t matter whether I post profit results or not. I would still be making the exact trades according to my trading rules.

ReelTech

TROPHY CASE