Adaptive Capital Defense (V3.7)

FORWARD_PAPER

Defensive capital preservation with tactical downside hedging (~5–7 trades/mo, max 48h holding window, +5.40% in 2026, -1.15% 2026 DD).

Version: 3.7.2•Research ID: FREQAI_V3_7_S2•Timeframe: 4h•Holding Horizon: Max 48h (Fixed 2-Day Cap)•Risk: Conservative Defense

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Forward Untouched Holdout

OOS Verifiable

Net Return:+5.40%

Max Drawdown:-1.15%

Completed Trades:62 trades

Sharpe / Sortino:2.10 / 5.80

Friction basis: 38.0 bps roundtrip canonical friction

Canonical Development History

1.31 Yrs Universe

Historical Return:+68.50% (Full) / +42.10% (OOS)

Historical Max DD:-2.10%

Completed Trades:94 trades

Historical Sharpe:5.45

Artifact hash verified: bcc5da6b8ac51877...

Execution Telemetry & Signals

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Public Model Transparency & Mechanics

What it Trades & Universe

Engineered for capital defense and smooth equity curves across 10 major cryptocurrencies (~62 trades in 2026). Fixed Max 48h Holding Horizon: Operates under the classic V3.7 maximum holding limit of 48 hours (2 days) per position to cap time exposure—unlike newer V4.3/V4.4 models that can hold multi-day runners up to 96h–216h. Automatically scales down position sizes during heightened volatility and initiates tactical downside hedges (+5.40% in 2026, +42.10% OOS, -1.15% 2026 drawdown). Ideal for conservative allocators prioritizing minimal drawdowns and short 48h max exposure.

Methodology & Gating

Dynamic risk-budgeting framework with volatility dispersion inverse sizing, strict 48-hour maximum holding cap, market stress dampening, and tactical hedging.

Preferred Market Regime

Volatile or declining market regimes where defensive risk controls and hedging outpace long-only beta.

Underperformance Conditions

Parabolic multi-month bull runs where conservative sizing caps total upside.