{"id":4790,"date":"2024-04-13T12:07:18","date_gmt":"2024-04-13T12:07:18","guid":{"rendered":"https:\/\/prosperity.newai.com.au\/?p=4790"},"modified":"2025-04-13T12:44:58","modified_gmt":"2025-04-13T12:44:58","slug":"correction-and-strategy-update-for-round-4-trading","status":"publish","type":"post","link":"https:\/\/prosperity.newai.com.au\/index.php\/2024\/04\/13\/correction-and-strategy-update-for-round-4-trading\/","title":{"rendered":"Correction and Strategy Update for Round 4 Trading"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"4790\" class=\"elementor elementor-4790\">\n\t\t\t\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-cbb0b5b elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"cbb0b5b\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-b306644\" data-id=\"b306644\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-a41ccfb elementor-widget elementor-widget-text-editor\" data-id=\"a41ccfb\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.6.7 - 03-07-2022 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#818a91;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#818a91;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<p><b>Part 1: Corrections to Previous Analysis<\/b><\/p><p>1. Orchids Performance Issue Clarification:<\/p><p>\u2981 The poor performance in Round 3 was NOT due to IMC changing bot behavior (as previously speculated)<\/p><p>\u2981 After discussion with teammates, confirmed the real reason was insufficient import tariffs leading to limited arbitrage opportunities<\/p><p>\u2981 Verification test: Keeping ASK at best BID+1 position still generated significant trading volume (though resulted in consistent losses)<\/p><p>2. Backtest Results Adjustment:<\/p><p>\u2981 The previously reported 30k+ profit appears overfitted<\/p><p>\u2981 Issue: Used imsample-fitted implied volatility which doesn&#8217;t generalize well<\/p><p>\u2981 Better approach: Using 3-day average volatility shows more stable (though lower) results<\/p><p>\u2981 Current testing: Experimenting with exponential moving average (EMA) implied volatility for fair price calculation<\/p><p>\u2981 Additional note: Still haven&#8217;t figured out optimal use of sunlight and humidity data<\/p><p>\u2981 Decision: Will maintain current coconut strategy while refocusing on Orchids improvement<\/p><p><b>Part 2: Manual Trading Strategy for Current Round<\/b><\/p><p>Key Variables:<\/p><p>\u2981 Personal low bid<\/p><p>\u2981 Personal high bid<\/p><p>\u2981 Market average high bid<\/p><p>Core Rules:<\/p><p>\u2981 If personal high bid &gt; market average: No PNL penalty<\/p><p>\u2981 If personal high bid &lt; market average: PNL penalty applies<\/p><p>\u2981 Conclusion: Should strategically increase both bid prices<\/p><p>Optimal Bidding Strategy:<\/p><p>\u2981 Mathematical relationship derived from payout formula derivative:<br \/>Optimal low bid = (2\/3) \u00d7 high bid<\/p><p>\u2981 Implementation steps:<\/p><p>(1)\u00a0 Estimate market average high bid<\/p><p>(2) Set personal bids as:<\/p><p>\u00a0 \u00a0\u2981 Low bid = (2\/3) \u00d7 estimated average<\/p><p>\u00a0 \u00a0\u2981 High bid = 1 \u00d7 estimated average<\/p><p>Sensitivity Analysis (Refer to the Figure):<\/p><p>\u2981 X-axis: Our high bid value<\/p><p>\u2981 Y-axis: Payout percentage relative to previous round&#8217;s optimal solution<\/p><p>\u2981 Key observations:<\/p><p>(1) Without PNL cut, optimal high bid = 78<\/p><p>(2) Optimal bid increases with rising market average<\/p><p>(3) When low bid is optimal, high bid changes have minimal PNL impact<\/p><p>(4) Near 78, PNL shows low sensitivity to bid changes (small first-order derivative)<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-fe2dec5 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"fe2dec5\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-76eb006\" data-id=\"76eb006\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-96a6363 elementor-widget elementor-widget-image\" data-id=\"96a6363\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.6.7 - 03-07-2022 *\/\n.elementor-widget-image{text-align:center}.elementor-widget-image a{display:inline-block}.elementor-widget-image a img[src$=\".svg\"]{width:48px}.elementor-widget-image img{vertical-align:middle;display:inline-block}<\/style>\t\t\t\t\t\t\t\t\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"1296\" height=\"495\" src=\"https:\/\/prosperity.newai.com.au\/wp-content\/uploads\/2025\/04\/24-2.jpg\" class=\"attachment-full size-full\" alt=\"\" srcset=\"https:\/\/prosperity.newai.com.au\/wp-content\/uploads\/2025\/04\/24-2.jpg 1296w, https:\/\/prosperity.newai.com.au\/wp-content\/uploads\/2025\/04\/24-2-300x115.jpg 300w, https:\/\/prosperity.newai.com.au\/wp-content\/uploads\/2025\/04\/24-2-1024x391.jpg 1024w, https:\/\/prosperity.newai.com.au\/wp-content\/uploads\/2025\/04\/24-2-768x293.jpg 768w\" sizes=\"auto, (max-width: 1296px) 100vw, 1296px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-a7dcd43 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"a7dcd43\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-2ed9c93\" data-id=\"2ed9c93\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-9f7cfe2 elementor-widget elementor-widget-text-editor\" data-id=\"9f7cfe2\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<p>Practical Recommendation:<\/p>\n<p>\u2981 Submit slightly higher than calculated high bid<\/p>\n<p>\u2981 Reasoning:<\/p>\n<p>&nbsp; &nbsp;\u2981 Reduced sensitivity near the 78 threshold<\/p>\n<p>&nbsp; &nbsp;\u2981 More conservative approach against potential underestimation of market average<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Part 1: Corrections to Previous Analysis 1. Orchids Performance Issue Clarification: \u2981 The poor performance in Round 3 was NOT due to IMC changing bot behavior (as previously speculated) \u2981 After discussion with teammates, confirmed the real reason was insufficient import tariffs leading to limited arbitrage opportunities \u2981 Verification test: Keeping ASK at best BID+1 [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":4537,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[38],"tags":[],"class_list":["post-4790","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-2024r4"],"acf":[],"_links":{"self":[{"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/posts\/4790","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/comments?post=4790"}],"version-history":[{"count":16,"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/posts\/4790\/revisions"}],"predecessor-version":[{"id":4807,"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/posts\/4790\/revisions\/4807"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/media\/4537"}],"wp:attachment":[{"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/media?parent=4790"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/categories?post=4790"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prosperity.newai.com.au\/index.php\/wp-json\/wp\/v2\/tags?post=4790"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}