Polaris is a quant strategy I’ve been running since late 2024, trading BTC/USDT perpetual futures on Binance, classified as a trend-following strategy. Real-time live performance data is available on the Polaris Live Tracker page.
This post covers the strategy’s core logic, live trading results, and risk management framework.
Why Trend Following
Quant strategies roughly fall into two categories:
Mean Reversion: Opens counter-trend positions when price deviates from the mean, waiting for it to revert. Works well in choppy markets but gets whipsawed in trending markets.
Trend Following: Opens positions in the direction of the trend when one forms, following the move. Profits during strong trends but incurs small losses in choppy markets.
I chose trend following for these reasons:
BTC has strong trending behavior: Historically, BTC has experienced several month-long directional trends that are more extreme than stock market trends, giving trend-following strategies more room to perform.
Simple, interpretable logic: Trend following’s core principle is “follow the market, don’t predict the top or bottom.” I can understand the entry and exit logic of every trade, making debugging easier when issues arise.
Long-term effectiveness has empirical support: CTA funds (commodity trend-following funds) have operated globally for decades, and trend following as a strategy class has substantial historical data supporting its viability.
Strategy Overview
- Trading Instrument: BTC/USDT perpetual futures (Binance)
- Timeframe: Hourly signals, 24/7 operation
- Direction: Long and short (can short)
- Position Style: Hold after trend confirmation, exit when trend reverses, no fixed take-profit targets
- Risk Management: Dynamically adjust position size based on volatility, with maximum drawdown stop-loss threshold
Core Principle: Enter when a trend appears, exit when the trend ends. Don’t predict how high BTC will go—just determine whether a trend is currently in progress.
Live Trading Performance
Current performance metrics are displayed in real-time on the Polaris Live Tracker page, including:
- Cumulative return (in USDT)
- Current position direction (long/short/flat)
- Entry and exit records for each signal
- Maximum drawdown
Here are some key metrics (these numbers update; refer to the page for the latest):
Running Period: From October 2024 to now, spanning various market conditions—BTC rallying to $100k, consolidation at highs, pullbacks, and more.
Maximum Drawdown: Trend-following strategies experience drawdowns during choppy, choppy markets—that’s an inherent characteristic of this strategy type, not a bug. Good years must earn enough to cover bad years’ losses.
Signal Frequency: Average of 4–8 signal changes per month. Not a high-frequency strategy.
Risk Management
This matters more than strategy parameters.
Position Sizing
No all-in bets. Each position uses only a fixed percentage of account equity. This percentage adjusts dynamically based on current market volatility—reduce size when volatility is high, increase modestly when low.
Principle: Maximum loss per trade never exceeds a fixed percentage of account equity. This percentage reflects what I can psychologically tolerate. Even in worst-case scenarios, I can maintain discipline.
Stop-Loss Logic
Trend-following strategies self-correct by reversing direction—when the trend signal flips, we close the current position and open the opposite one.
But beyond signal-based exits, I’ve also set an account-level stop-loss threshold: if drawdown over a period exceeds the maximum tolerable level, the strategy automatically pauses trading until market structure clarifies, then resumes.
Server Stability
The strategy runs on an AWS Singapore node with independent deployment, no shared resources. It includes:
- Heartbeat monitoring: hourly checks that the strategy is running
- Exception alerts: Telegram notifications for anomalies
- Regular backups: strategy state and trade history backed up periodically
This Is Not Investment Advice
Polaris’s live performance reflects my own decision-making, not investment advice.
Quant strategies have uncertain lifespans: market structure changes, and past performance doesn’t guarantee future results. I run this strategy because I believe in trend following’s long-term effectiveness as a strategy class, combined with strict risk controls as a safety net.
If you’re interested in learning quantitative trading, start with understanding trend-following fundamentals. Once you grasp the logic, decide whether it’s right for your own account.
→ View Polaris Live Performance Data → Read Binance API From Zero to First Order → Read Quant Toolkit Stack
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