Isochrons

An isochron is a line joining points of equal time.

The same root gives isochronism: a pendulum takes the same time to swing whether the swing is wide or narrow. Galileo is said to have noticed it watching a lamp move in a cathedral. Clockmakers spent two centuries chasing it, because a clock is only as good as its ability to ignore how far the pendulum travels.

We named the firm after that, not after anything the market does. Same size, same target, same forced exit, whether the week moved 4% or 40%.

Our signal is not a secret. Short-term mean reversion is the most written-about trade there is, printed in open collections, and we would rather say so than dress it up.

What is rare is doing it the same way in a calm week and a wild one. Every time we broke our own rules by hand, it was in a week that felt like an exception at the time. That is the whole claim, and the rest of this page is the evidence for it.

We sell ETH against our own ETH. The stack sits in ETH and the short is opened through a coin-margined contract, so what we put up, what we make and what we lose are all ETH. The account grows in coin, and nothing has to be converted back.

One thing follows from this, and it matters: we can never end up short more ETH than we own. The stack behind the trade is the ceiling.

Three things were taken out of the strategy after they failed, and each cost us months to admit.

Averaging down. Over nine years at identical exposure, single entry returns 11.45× against 1.96× for the pyramid. It sounds reasonable and it feels brave. It is neither.

The entry pattern. We read candles and looked for signs a move was running out of steam. For a year. When we measured it, it no longer mattered. The market does not care how good our reasons sound.

The second asset. We ran a symmetric leg on bitcoin and put it through the same audit ETH passed. Across 405 versions the result could not be told apart from luck: 83% of the time chance alone would have done as well. For ETH that figure is 2.8%. The leg closed on 1 August. One account, one asset, from here.

We will fall behind in rising markets. We take only about 0.8 of the market's move, and everything we earn on top of it comes from the falls: we beat the market on 27% of up days and on 72% of down days. In a long bull run we will look silly. That is the price of the structure, not a fault.

Drawdowns will be deeper than anything in the reporting so far. Measured over nine years at the size we run now: 34.8% in coin terms.

There is no stop-loss in the usual sense. A position closes at its target or on the clock. That is on purpose, and it is exactly why we keep spare capital and stay well under the size we could take.

Every idea we tested and dropped goes in the notebook next to the ones that passed. Deciding not to launch takes the same weeks of work, and the list of what we threw out says more about us than the list of what we kept.