#量化 #量化交易 #量化策略

How much can personal quantification earn?
How much can individual quantification earn?
This issue is hard to truly understand without experiencing one or two years of quantitative proprietary trading.
In the early stages of live trading, when you see the backtesting curve showing results of compounded returns in the hundreds or thousands of times, you may feel like you have found the "holy grail," as if you are about to achieve financial freedom.
But reality is often not that ideal - there is actually an invisible formula that determines your profit ceiling and the speed of wealth growth, which is not much related to the strategy itself, but more dependent on your risk tolerance.
The formula is as follows:
Your stable mindset's net worth = the absolute value of the drawdown amount you can withstand / the average of multiple strategy drawdowns
When the net worth exceeds your psychological threshold, you will instinctively consider withdrawing funds, and compound growth will gradually turn into simple interest growth.
And this "acceptable drawdown amount" is not fixed.
When you are broke, a drawdown from 5 million to 3 million in your strategy account may be completely unacceptable; but when you already have 10 million in assets, the psychological feelings about the same drawdown will be different.
Similarly, when your account only has 20,000, you might be able to accept a drawdown of 10,000; but when your account size reaches 100 million, you may not be able to accept a fluctuation of 50 million.
Therefore, personal wealth growth does not rise continuously like an idealized Holy Grail curve, but is a process of constantly rebalancing funds between investment and living expenses.
Gradually achieve your wealth goals through continuous adjustments and rebalancing.
This year, there was a great friend in our community who withdrew funds only after multiplying his principal by 125 times.
His principal was even borrowed, and he experienced multiple drawdowns of around 50% during the process, with each drawdown amount several times greater than his principal.
I am well aware that his ability to achieve such returns is not only due to his excellent strategy but also because he possesses an extraordinary risk tolerance. With his level of risk tolerance, he will automatically be matched with corresponding massive returns; wealth is merely a manifestation of his boldness.