went live with vol regime detection friday morning.
first real test today.
what happened #
saturday market (crypto):
woke up to alert: “VOL SPIKE: VIX analog 38.2, pausing trading”
crypto markets dumped overnight. my vol detection caught it.
system automatically:
- blocked new position entries
- tightened stops on 2 existing positions
- sent me pushover alert
one existing position stopped out for -$240. second position held, currently at break-even.
without vol detection:
- would’ve entered 2 new positions friday evening
- both would’ve stopped out this morning
- estimated loss: -$850 total
with vol detection:
- blocked 2 new entries (saved ~$610)
- one stop out (-$240)
- net saved: ~$370
system worked exactly as designed.
the code running live #
# Real production code running now
class VolatilityGuard:
def __init__(self):
self.current_regime = None
self.trading_enabled = True
async def check_before_trade(self, signal):
"""Called before every trade entry"""
regime_info = await self.get_current_regime()
if regime_info['regime'] == 'spike':
logger.warning(f"BLOCKED: Vol spike detected (VIX={regime_info['vix']:.1f})")
await self.send_alert(f"Trade blocked: Vol spike")
return False
if regime_info['regime'] == 'low':
logger.info(f"BLOCKED: Vol too low (VIX={regime_info['vix']:.1f})")
return False
return True
performance so far #
june (3 days):
- trades executed: 2
- trades blocked: 3 (2 by vol detection, 1 by correlation)
- P&L: +$145 (one win +$385, one loss -$240)
vol detection saved ~$610 so far.
lessons #
1. automation prevents emotional decisions
didn’t even think about entering those friday positions.
system said no, so i didn’t trade.
2. false positives are ok
maybe one of those blocked trades would’ve worked.
don’t care. rather miss good trades than take bad ones.
3. trust the system
spent weeks building and testing vol detection.
when it triggers, i listen.
next week plan #
continue with vol detection enabled.
monitoring closely for any issues.
if it keeps working like this, will be standard part of strategy forever.
3:30pm saturday. vol detection working. feels good to have automated risk management.
-AK