The Engineering of Model, Structure, and Discipline – The Core Survival Philosophy
The Camino Strategy Framework is a highly modular, institutional-grade system designed to eliminate all human emotional biases in trading. Our goal is to achieve highly disciplined, highly reproducible professional trading through rigid structure and discipline, and to maximize Risk-Adjusted Return (with a strong focus on long-term Sharpe Ratio). The core philosophy of the entire system is: while knowing when to be aggressive, it is even more critical to know exactly when risk must be strictly controlled.
Three-Layer Structure and Correspondence with Competition Modules: The Decision Chain
Market Map – Macro Risk Definition Layer (L1):
- Corresponds to Module: Macro & Market Map Competition.
- Core Function -> Real-time analysis of the flow of funds and volatility correlation between major global stock indices (S&P500, IBEX35) and key crypto assets. The system calculates and generates Camino’s unique Cross-Market Risk Sentiment Index via a proprietary model. This index determines whether we are currently in a state of Risk Aversion, Neutrality, or Risk Seeking, thereby guiding the execution of L2 and L3.
- Output Result: Daily output of the overall risk exposure recommendation (e.g., maximum total position limit should be 40% or 80%).
Waypoints – Tactical Execution Layer (L2)
- Corresponds to Module: Live Trading Competition.
- Core Function -> Based on the risk definition from L1 (Market Map), sets specific Entry Price Ranges and Tactics for Staggered Entry. We emphasize two core position management methods:
- Cost Averaging Method: Utilizing pre-set price points for staggered entry after trend confirmation to optimize the average cost.
- Risk Parity Method: Ensuring that each trade contributes a similar amount of risk to the overall portfolio, rather than simple equal financial allocation.
- Execution Details: Every Waypoint execution has clear stop-loss, target prices, and estimated holding times, ensuring traceability of the trade.
Guardrails – Mandatory Discipline Layer (L3)
- Corresponds to Module: Systematic Engineering & Guardrails Competition.
- Core Function -> Mandatory Risk Budget Execution. Guardrails acts as a multi-layered safety net:
- Soft Stop-Loss: Automatic liquidation upon reaching the pre-set maximum loss for a single trade.
- Hard Reduction: When portfolio drawdown hits two specific thresholds (e.g., intra-day -2% or cumulative -5%), the Guardrails system will automatically enforce a reduction in all exposed positions and lock in a new risk budget. This embodies the philosophy of constraining the pursuit of returns with drawdowns and risk budgets, ensuring capital is never in an ‘uncontrolled’ state.