Best Practices to publish your strategy on Mudrex

The Mudrex Marketplace helps investors identify and invest in strategies that pro traders have created. The Marketplace is different from any other investment platform in 3 main ways:

• Users can invest in a strategy WITHOUT handing over funds to a third party
• Users can test and validate a strategy and do not need to rely on a third parties word making the system TRUSTLESS
• Traders can share results and deploy funds on their strategies up without exposing the way it works. The IP always remains with the trader

As with any other investment platform, users require a limited choice of high-quality products to invest. Quality for in this case implies 2 things

• Setting the correct expectation of risks involved and returns expected over a timeframe
• Giving correct information about what are correct assets to build this on

We have designed a strategy review process to ensure that users get a limited number of high-quality strategies to invest in. Below are details of best practices traders should follow when the submit their strategy to the marketplace for review.

Review Process:

• Each strategy will be evaluated by all members of the Mudrex Review Committee (RC)
• To ensure that strategies submitted are of a high quality, every member will have the veto right to reject the strategy
• At no point in time will the RC have access to how your strategy is built. Your strategy is only yours.
• RC will only have access to your submission details and will be able to run backtest on your strategy which will be visible to you
• The nature of the evaluation is objective and dependent on the individual strategies and submitted details
• If rejected, the RC will provide detailed information about why the submission was rejected. Traders can address the points mentioned in the submission and resubmit once they are ready
• Strategies will be rejected only if they do not comply with the guidelines mentioned below

General points to note

• DO NOT promote unreasonably returns
  • You might have some backtest scenarios which are outliers and show unbelievable results. These should not be promoted. Setting the right expectations is key to long term success
• DO NOT use language in your description that overpromises or is not along the lines of how your strategy performs
• DO NOT flood the user with too much choice. Provide a limited set of parameters and variables that the user should invest is. The choice is good. Too much choice is bad
• DO describe clearly under what scenarios the strategy will work and when it won't.

Going against the above will more often than not lead us to reject your strategy. Lets now look at best practice for each field

Short description

Short description will appear in the listing page and is the first part users will look at. This is an introduction to your strategy  

• Keep it short and simple. Ideally <100 characters.
• Give a summary of the core idea on which it is built.

Eg:

Captures large price swings using HA candles. Optimized for volatile choppy markets.

Description

Description is a field where you can add more details about what your strategy does. You should focus on:

• The fundamental hypothesis used to make your strategy
• When is it expected to buy and when is it expected to sell 
• Which kind of assets it works best for
• Which market conditions are preferred and why
• What time frames to run it for

Eg:

HA Price Swing strategy is based on the hypothesis that prices revert to the mean in short timeframes. The strategy buys when it sees prices are just starting to move up and sells when the strategy dips below a peak. 

It works best in volatile conditions that see lots of swings. It will win almost always when the market is oscillating. In bull markets, it is designed to capture as much of the up-move as it can. It ignores investing when markets are down.

The strategy is not designed to work in bear conditions because it is not optimized to prevent down moves. THE STRATEGY WILL LOOSE when it swings down.

The strategy is designed intraday candles so using 10m, 15m, and 30m work well. Also invest only in high liquidity markets like BTC/USDT, ETH/USDT, BTC/ETH

Do not use this strategy in shorting conditions or with leverage. You will lose!

Monthly Subscription Fee

Every strategy on Mudrex is paid and the creator of the strategy has complete control over the subscription fee. Deciding how to price your strategy is an important part of publishing your strategy. Too high a price will make it a deterrent from users to invest. Too low and you are not able to extract enough value.

As a thumb-rule, users are comfortable sharing 20-30% of the profits they make with traders happily. So if you expect your strategy to give ~20% returns in a month and on average users invest 500 USD in your strategy; you expect it will make ~100 USD for them in a month. In a scenario like this, Users would be happy to pay ~20-30 USD for this. So pricing your strategy at ~20 USD per month would roughly be fair.

Note: Mudrex keeps 30% of the subscription fees and returns 70% to the traders. 

Recommended Market Conditions, Assets and timeframes

Defining these will help the investor invest in the correct asset/market and timeframe. They help as guidelines and are required by every trader to submit.

Note: We will test your strategy in the given conditions and it should at least have a positive Returns Vs Market in the conditions defined. If it doesn't then we will reject your subscription.

Featured Backtests

Featured backtests are displayed on both the listing and detailed page and act a visual descriptor of strategy performance. It is very easy for users to be misled if incorrect, manipulated backtests are surfaced. Submitting backtests that are a reasonable indicator of performance to be expected is important. Featured backtests should

• be run over a period of 2 months at least
• have at least 10 trades
• be run on the conditions you have recommended
• have positive returns and returns over market
• not be run using leverage
• have fees included

Backtests submissions which do not comply to the above will be rejected.

Objective criteria for evaluation

In order to safeguard investor interest, we are also adding the below objective criteria that need to be adhered to before publishing

• Max drawdown < 35% in a backtest over 18 months 
• < 25% of months with a loss over the last 18 months
• < 20% of months with 5% or more loss over the last 18 months
• No three month period with a loss

You can use this tool to calculate % and number of losing months: https://docs.google.com/spreadsheets/d/152Z6Mh475LcGpcqRZ43dYEYVtZSK8oQFAc18gPXk__U/edit#gid=2134850163

Note: All your backtests run on the latest version will be available to the user always. Featured backtests are just the ones you choose to highlight.

We look forward to building a large healthy ecosystem of traders and investors with its foundations built on transparency and open communication. As time progresses we will continue to add features that promote and help grow the ecosystem providing a valuable alternative for investors to invest and traders to earn from!

Happy Trading!