Lesson Learned #043: Crypto Strategy Removed - Simplify and Focus

ID: LL-043 Impact: Identified through automated analysis

Date: December 15, 2025 Severity: HIGH Category: Strategy, Capital Allocation, Simplification Decision By: CEO

Executive Summary

Crypto trading was removed from the system entirely due to 0% win rate and the principle of focusing capital on proven winners.

The Data

Metric	Value
Total Crypto P/L	-$0.43
Win Rate	0%
Trades	3 (all losses)
Complexity Added	High (24/7 monitoring, different APIs)

Individual Trades

Symbol	P/L	Date	Result
ETHUSD	-$0.01	2025-12-09	❌ Loss
BTCUSD	-$0.41	2025-12-11	❌ Loss
SOLUSD	-$0.01	2025-12-11	❌ Loss

Comparison to Options

Strategy	P/L	Win Rate	Status
Options	+$327	75%	✅ PRIMARY
Crypto	-$0.43	0%	❌ REMOVED

Options outperformed crypto by $327.43 with 75% higher win rate.

Why Removal is the Right Call

Focus on Winners: Capital should flow to proven strategies (options)
Reduce Complexity: Crypto requires 24/7 monitoring, different APIs, weekend execution
Opportunity Cost: Every dollar in crypto could be in options making 75% win rate returns
DCA into Downtrends Failed: The “buy the dip” strategy consistently lost money

Changes Made

1. System State (`data/system_state.json`)

"tier5": {
    "name": "Crypto Strategy (DISABLED)",
    "allocation": 0.0,
    "enabled": false,
    "disabled_reason": "0% win rate, -$0.43 total P/L"
}

2. Portfolio Allocation (`config/portfolio_allocation.yaml`)

crypto:
    weight: 0.00  # DISABLED
    enabled: false
    disabled_reason: "0% win rate, focus on options"

3. Capital Reallocation

Crypto allocation (2%): → Options
Options now: 37% (was 35%)
Daily options budget: $27/day (was $25)

The Simplification Principle

“Simplicity is the ultimate sophistication.” - Leonardo da Vinci

Before (8 strategies):

Options ✅
Core ETFs ✅
Growth Stocks ✅
Treasuries ✅
REITs (testing)
Precious Metals (testing)
Crypto ❌ REMOVED
Bonds ✅

After (7 strategies):

One less strategy to monitor
One less API to maintain
One less failure point
More capital for winners

Prevention: When to Remove a Strategy

A strategy should be removed when:

Win rate < 30% over 3+ trades
Consistent losses (no wins)
Complexity outweighs returns
Capital better deployed elsewhere
Strategy conflicts with proven winners

Key Takeaway

Don’t keep losing strategies out of hope. The data was clear after 3 trades - crypto was losing money. We should have cut it sooner.

Kill your losers fast, let your winners run.