# Short-Bias Strategy Summary

Date: 2026-05-08

## Direction Exposure

The currently selected and deployed candidates are too long-biased:

- Remote `eth-nextgen-micro` observer currently maps nextgen state to `long` or `flat`.
- `rotation-risk` is BTC/ETH long-only rotation plus cash.
- ETH RSI/TWAP candidates are long-only pullback entries.
- Some research modules support short trades, but the promoted live/shadow candidates do not yet use a real short-biased leg.

## Results

### Intraday Short-Only

Reject.

BTC/ETH `3m/5m/15m` short-only tests did not produce a usable candidate. Best row was only `+1.41%` total with `21.78%` drawdown and negative 1y/6m/3m returns.

### Swing Short-Only

Keep for follow-up validation.

Best candidate:

- `vol_expansion_short-btc-4H-fast20-slow80-entry20-exit10-atr14-stop_atr3.0-take_atr6.0-max_hold120-vol_window120-vol_quantile0.8`
- Total return: `285.27%`
- Annualized return: `23.75%`
- Max drawdown: `24.93%`
- Calmar: `0.95`
- Trades: `75`
- Win rate: `46.67%`
- Profit factor: `2.11`
- Short trade ratio: `1.0`
- 3y/1y/6m/3m returns are all positive.

This is usable as a research candidate, but not yet as a live candidate because drawdown is materially higher than rotation-risk.

### Short Overlay

Keep as the most practical next direction.

A small short overlay on top of `rotation-risk` improved risk behavior:

- Standalone `rotation-risk` max drawdown: about `7.72%`
- With roughly `5%` short overlay: max drawdown falls to about `6.50%`
- Annualized return falls from about `15.64%` to about `14.65%` to `15.05%`
- Recent 6m improves from about `-0.28%` to roughly `+1.1%` to `+2.5%`

This is not a strong standalone short strategy, but it is useful as a small protection leg during risk-off or high-volatility regimes.

## Decision

Do not replace the current long-biased strategy with short-only intraday trading.

Next best step: build a read-only signal stream for `rotation-risk + small short overlay`, then compare it against plain `rotation-risk` on live candles before any real short orders are considered.