Strat Example 1 (IF Single Condition Execution)

Strategy Mechanics

This example illustrates a momentum fade strategy utilizing RSI divergences to capture mean reversion opportunities in the ETH/USDT pair.

Signal Generation

The strategy monitors RSI indicators for extreme readings:

• Buy Signal: RSI crosses below 30 (oversold threshold) indicating potential upward reversal

• Sell Signal: RSI crosses above 70 (overbought threshold) suggesting downward reversion

• Execution Logic: Market orders triggered automatically upon signal confirmation

• Position Sizing: Predetermined percentage of pool capital per trade

Capital Flow

• Base Currency: Investors deposit USDT into the strategy vault

• Trading Cycle: USDT → ETH (buy signal) → USDT (sell signal)

• Idle Capital: USDT remains in vault between trades earning no yield

• Compounding: Profits automatically reinvested in subsequent trades

Performance Distribution

Return Calculation Scenario

Assuming the strategy generates +20% return over its epoch:

Gross Performance: +20% on deposited capital

Fee Waterfall:

1. Performance Fee (to Creator): 10% of profits = 2% of capital

2. Platform Commission: 20% of performance fee = 0.4% of capital

3. Net to Investors: 20% - 2% - 0.4% = 17.6% return

Mathematical Breakdown

For 10,000 USDT deposited:

• Gross Profit: 2,000 USDT

• Creator Fee: 200 USDT (10% of profit)

• Platform Fee: 40 USDT (20% of creator fee)

• Investor Receives: 11,760 USDT (17.6% net return)

Fee Structure Deep Dive

Performance Fee Model

• High-Water Mark: Fees charged only on profits exceeding previous peaks

• No Management Fee: Creator earns solely from successful performance

• Aligned Incentives: Creator profits only when investors profit

Platform Revenue Share

The 20% commission on performance fees funds:

• Infrastructure Maintenance: Execution servers, data feeds, gas costs

• Protocol Development: Continuous platform improvements

• Token Holder Dividends: 50% of platform revenues distributed to $RANK holders

• Treasury Growth: Strategic reserves for ecosystem expansion

Risk Considerations

Strategy-Specific Risks

• Whipsaw Markets: RSI can remain extreme during strong trends

• False Signals: Oversold can become more oversold in bear markets

• Execution Slippage: Large trades may impact market prices

• Correlation Risk: RSI effectiveness varies across market regimes

Mitigation Mechanisms

• Stop Losses: Maximum loss per trade capped at predetermined percentage

• Position Limits: Maximum exposure prevents catastrophic losses

• Timeout Periods: Minimum time between trades prevents overtrading

• Drawdown Limits: Strategy pauses if losses exceed threshold

Advanced Implementation

Signal Refinement

Production strategies typically incorporate:

• Multi-Timeframe Confirmation: RSI alignment across different periods

• Volume Filters: Ensuring sufficient liquidity for execution

• Trend Filters: Avoiding counter-trend trades in strong markets

• Volatility Adjustment: Dynamic thresholds based on market conditions

Execution Optimization

• Limit Orders: Reducing market impact through patient execution

• Time-Weighted Averaging: Splitting large orders across time

• Cross-Exchange Routing: Finding best prices across multiple venues

• Gas Optimization: Batching operations to minimize transaction costs

This example demonstrates how simple technical indicators transform into sophisticated trading systems through Rank's infrastructure, with transparent fee structures ensuring aligned incentives across creators, investors, and the platform.