After tons of intensive development and stressful testing, we're already happy to announce that SAF3 has not only met but exceeded our expectations. And yes in such a small timeframe. This week has been an utter shit-show with plenty of moves that we intended to filter out. So, our ambitious projections have now been validated through live trading data.
By the end of today, these enhanced algo will be available to all users.
TLDR; Summary
SAF3 represents a significant advancement in our algorithmic trading capabilities:
🎯 Proven Performance: 28.2% improvement in trade success rate
🛡️ Enhanced Risk Management: 20.6% reduction in loss magnitude
⚡ Operational Efficiency: 21.9% reduction in unnecessary trades
📈 Strategic Value: 39.0% improvement in capital efficiency
The SAF3 enhancement delivers measurable, sustainable improvements that translate to better risk-adjusted returns, enhanced capital preservation, and competitive positioning in the algorithmic trading space.
Project Overview
System Evolution
- SAF2 (Baseline): Second-generation range trading algorithm
- SAF3 (Enhanced): Third-generation with advanced filtering mechanisms
- Development Period: Q1-Q2 2025
- Testing Period: July 20-24, 2025 (5-day live comparison) Yes, enough to see our enhanced filters and proactive analysis work, plenty of trades during a very shitty week for our main algorithm.
Enhancement Objectives
We set out with clear goals for SAF3:
- Improve trade selection quality
- Reduce false signal execution
- Enhance risk-adjusted returns
- Minimize drawdown periods
- Increase capital efficiency
The results have exceeded our expectations across all metrics.
Performance Improvements Delivered
TRADE SELECTION ENHANCEMENT
RISK MANAGEMENT ENHANCEMENT
OPERATIONAL EFFICIENCY
Technical Enhancements Implemented in SAF3
Advanced Signal Filtering
Enhancement: Multi-layered signal validation system
- Pre-execution filtering with market regime detection
- Volatility assessment with dynamic threshold adjustment
- Trend strength analysis for directional bias confirmation
- Volume profile validation for liquidity depth verification
Impact: 21.9% reduction in low-quality trade executions
Risk Assessment Engine
Enhancement: Real-time risk evaluation framework
- Risk sizing optimization based on market conditions
- Correlation analysis for cross-asset exposure monitoring
- Drawdown prediction with loss magnitude estimation
- Market timing filters for optimal entry/exit timing
Impact: 20.6% reduction in average loss magnitude
Market Regime Detection
Enhancement: Intelligent market state identification
- Trend vs Range detection for algorithm behavior adaptation
- Volatility regime classification for strategy parameter adjustment
- Liquidity assessment through market depth evaluation
- News impact filtering for event-driven trade avoidance
Impact: 28.2% improvement in win rate through better market timing
Quality Control Mechanisms
Enhancement: Trade validation and rejection system
- Breakout detection with pattern recognition improvements
- Whipsaw prevention through consolidation period identification
- Momentum confirmation via multi-timeframe analysis
- Risk/reward optimization with dynamic ratio requirements
Impact: 4.4pp reduction in losing trade frequency
Algorithm Intelligence Evolution
Decision-Making Enhancement
The most fundamental change in SAF3 is the rebalancing of decision factors:
DECISION-MAKING EVOLUTION
Execution Philosophy Change
- SAF2: Reactive signal-based execution
- SAF3: Predictive context-aware execution
- Key Difference: Proactive vs reactive decision making
This shift represents a fundamental evolution in how our algorithm approaches the market.
Long-Term Strategic Implications
Scalability Benefits
Projected Annual Impact:
-
35-50% improvement in risk-adjusted returns
-
25-40% reduction in maximum drawdown periods
-
15-30% increase in capital utilization efficiency
Competitive Positioning
-
Superior signal quality: 28.2% improvement in trade selection
-
Enhanced adaptability: Better response to changing market conditions
-
Reduced noise: 21.9% elimination of false signals
-
Improved consistency: More stable performance metrics
Implementation Success Metrics
Primary KPIs Achieved
✅ Win Rate Enhancement: +28.2% relative improvement
✅ Trade Quality: 21.9% noise reduction
✅ Risk Control: 20.6% loss magnitude reduction
✅ Efficiency: 39.0% better capital deployment
Secondary Benefits Realized
✅ Reduced Correlation Risk: Better diversification of trades
✅ Improved Timing: Enhanced entry/exit optimization
✅ Market Adaptability: Better performance across conditions
✅ Operational Stability: More consistent daily performance
Stakeholder Value Proposition
Immediate Benefits (Proven)
-
28.2% higher success rate on trading decisions
-
21.9% reduction in unnecessary market exposure
-
20.6% smaller average losses when trades don't work
-
39.0% better overall capital efficiency
Long-Term Value Creation
Strategic Advantages:
-
Enhanced investor confidence through improved metrics
-
Increased competitive differentiation in algorithmic trading
-
Foundation for further algorithm evolution and enhancement
Backtest vs Reality: How SAF3 Performed
When we developed SAF3 (well, upgraded SAF2 enough to give it a bump in version), we had ambitious expectations based on our backtesting. Here's how the live results compared to our initial projections:
BACKTEST EXPECTATIONS vs LIVE RESULTS
The Reality: SAF3 not only met our backtest expectations but exceeded them across major metrics. This gives us confidence that the improvements are sustainable and not just artifacts of favorable market conditions during testing - market condtions turned out as bad as they could for a range trading system.
What This Means For You
As a user of our signals and our algorithms, you'll experience several tangible benefits:
-
Higher Quality Signals: You'll receive fewer but higher-conviction trade recommendations and trades, backed by deeper analysis and more robust validation.
-
Reduced Drawdowns: With SAF3's enhanced risk management, you can expect smaller and less frequent drawdowns.
-
Better Capital Efficiency: Your trading capital will work harder for you, with more precise entries and exits.
-
Consistent Performance: The system adapts to changing market conditions, providing more stable results across different environments.
The Trade-offs We're Willing to Make
We still believe in transparency, so let's address the elephant in the room. SAF3 isn't perfect, and there are trade-offs we've consciously made in favor of capital preservation and peace of mind. Oh, the Win Rate is still crap, but we aim at making money in the long run, not a short-term pump of capital and suden dump.
What We're Trading Away
Reduced Market Participation
-
21.9% fewer trades executed (25 vs 32 trades)
-
Less frequent capital deployment opportunities
-
May miss some active market periods where volume equals opportunity
Conservative Filtering
-
More selective approach may occasionally be too restrictive
-
Could miss breakout opportunities in highly volatile periods
-
May underperform SAF2 due to reduced correlation of tradeable assets
System Complexity
-
Requires higher computational resources - but covered by profits ;)
-
Increased system maintenance and monitoring needs (First 3 months)
What We're Gaining in Return
Capital Preservation
-
20.6% smaller losses when trades don't work out
-
39.0% better overall capital efficiency
-
Significantly reduced drawdown periods
Psychological Benefits
-
Less stress from overtrading and noise
-
More confidence in each signal quality
-
Better sleep knowing the system is more selective
Long-term Sustainability
-
28.2% higher win rate provides more consistent results
-
Better risk-adjusted returns over time
-
Foundation for steady, compound growth
The Core Question
SAF2: More aggressive, higher frequency, more opportunities
SAF3: More selective, lower frequency, higher quality
Is trading 21.9% fewer opportunities worth gaining 4.4 percentage points in win rate and 20.6% smaller losses? For us, the answer is absolutely yes. We'd rather preserve capital and nerves than chase every possible trade. Quality over quantity isn't just a trading philosophy—it's a lifestyle choice.