Knowing about a well performing strategy

Stratzy Algos
1

Hi senior experienced traders I’m planning to deploy ₹1.5lakh into a single strategy. Among Zen Credit Spread, Damper Credit Spread, and IV-Imbalance Credit Spread, which one has historically performed the most consistently across all market conditions (bullish, bearish, sideways, and highly volatile)? I’m looking for a strategy with stable returns and lower drawdowns rather than just the highest returns.

2

Damper credit is intraday strategy. Its win rate is around 66% over last 1 year. 2 out of 3 trades is profitable. But risk reward ratio is less compared to other credit spread strategies.

Zen and IV imbalance are overnight strategies. Win rate is around 60% with better risk reward ratio.

I woud suggest 1.6 Lacs allocation to Damper credit spread. 1 Lac each to other 2 strategies.

I also suggest allocating Mathematicians credit spread and Ratio flux credit spread if you have enough capital

Above obsrevations are based on past trades of last 1 year. Future performance may differ.

3

Thanks for your question! While it’s natural to compare strategies based on historical performance, it’s equally important to remember that past performance alone shouldn’t be the deciding factor. Every strategy is designed for different market conditions and will naturally go through periods of outperformance and temporary underperformance.

A more balanced approach is to diversify across three or more uncorrelated algos rather than allocating your entire capital to a single strategy. Combining strategies with different trading styles and market behaviours can help smooth the overall portfolio journey and reduce the impact of drawdowns from any one strategy.

While evaluating algos, consider factors such as:

  • Risk level and maximum drawdown

  • Recovery time after drawdowns

  • Risk-adjusted metrics like Sharpe and Sortino ratios

  • Strategy type (e.g., directional vs. non-directional, intraday vs. overnight)

  • How the strategy complements the rest of your portfolio

Ultimately, the objective shouldn’t be to identify a single “best” algo, but to build a portfolio of strategies that can work together across different market conditions.

1 Like
4

@nijinwilson Thank you so much bro for your valuable inputs :smiling_face_with_three_hearts: