How Quants use Loop Engineering to create a trading bot

How Quants use Loop Engineering to create a trading bot most people don't realize that quant traders never trust a strategy the first time that it works they run it through a loop that test each strategy over and over again until they find one that sticks here's how to build this out most people come up with an idea backtest this once and then once it looks great they go live and 2 weeks later they are bleeding money that strategy died with nothing iterating on it quant runs a loop testing strategy instead you generate a strategy backtest it score it against a specific metric read why it failed feed that information back in and then you generate a better version then you test that version read the failures and run it again each round keeps the variants that score well and refines the ones that did not the whole edge in quant trading is the iteration and most people don't iterate at all the loop also needs a way to score your strategy or else it just wonders the metric that quants use is called ICIR and all it measures is how consistently your strategy performs over time a strategy that makes a little bit money every single week completely beats out a strategy that makes a lot of money in one week and loses it all in the next that consistency scores what the loop optimizes towards and here's the second check that most people skip even a real strategy has a shelf life and the signal decays in two days you're basically just paying fees to chase noise if it decays in 50 days you have a real traceable edge the loop rejects these short life signals automatically and this is the most important part a loop that optimizes the same data that was built on does not find better strategies faster it just finds prettier noise faster every extra iteration is just another chance to accidentally fit the past data THE FIX Test survivors on data they've never seen. An out-of-sample gate. called an out of sample gate every strategy that survives a loop gets tested one final time on fresh data that is never seen if the consistency data holds on fresh data then the score is real if it does not it gets thrown out no matter how good it looked before I created a step by step guide on exactly how to build this loop system to help you build trading bots that find alpha just like the video and comment Quan and I'll send it to you follow for more ways to make money and run your business with tech and AI