R&D Phase Strategy (Days 1-90)

Strategic Decision: October 31, 2025 - CEO Approved

Why R&D Phase?

Brutal Truth Assessment:

  • Current P/L: -$0.14 (Day 3) - NOT profitable yet
  • Current strategy: Simple buy-and-hold (NO trading edge)
  • Reality: Building a Ferrari engine but driving in circles
  • Need: 90 days to build profitable momentum + RL system

Key Insight: We have world-class infrastructure (automation, agents, hygiene) but no profitable trading edge yet. R&D phase focuses on building that edge.

R&D Phase Goals (90 Days)

Month 1 (Days 1-30): Infrastructure + Data Collection

  • ✅ Fibonacci strategy implemented
  • ✅ Autonomous pre-commit hygiene
  • ✅ Daily reporting automated
  • 🔄 Collect 30 days of market data
  • 🔄 Build momentum indicator system (MACD + RSI + Volume)
  • Target: Break-even (small gains/losses acceptable)
  • Metric: System reliability 99.9%+

Month 2 (Days 31-60): Build Trading Edge

  • 🎯 Implement MACD + RSI + Volume entry/exit system
  • 🎯 Add stop-losses and profit-taking rules
  • 🎯 Build RL agent (Research, Signal, Risk, Execution subagents)
  • 🎯 Backtest with 60 days of collected data
  • Target: Win rate >55%, Sharpe ratio >1.0
  • Metric: Consistent small profits ($0.50-2/day)

Month 3 (Days 61-90): Validate & Optimize

  • 🎯 30 days of live testing with momentum + RL system
  • 🎯 Tune parameters based on real performance
  • 🎯 Add Alpha Vantage news sentiment
  • 🎯 Implement dynamic position sizing
  • Target: Win rate >60%, Sharpe ratio >1.5
  • Metric: Consistent profits ($3-5/day)

Success Criteria (Day 90)

All metrics align with enterprise evaluation best practices for R&D trading systems.

Go/No-Go for Scaling:

if (
    win_rate > 60 and
    sharpe_ratio > 1.5 and
    max_drawdown < 10 and
    profitable_30_days and
    no_critical_bugs
):
    # APPROVED: Scale to live trading with Fibonacci
    scale_to_live = True
else:
    # EXTEND R&D: Need more time
    extend_rd_phase()

Enforcement Automation

  • scripts/run_backtest_matrix.py runs the regime matrix in config/backtest_scenarios.yaml and persists structured metrics under data/backtests/.
  • scripts/enforce_promotion_gate.py consumes data/system_state.json plus the latest matrix summary and exits non-zero if any criterion above fails.
  • .github/workflows/daily-trading.yml runs both steps before the orchestrator so live trading cannot start unless the guard returns green.

What “R&D Phase” Means

DO Focus On:

  • ✅ Building profitable trading edge
  • ✅ System reliability and automation
  • ✅ Data collection and learning
  • ✅ Agent intelligence and introspection
  • ✅ Infrastructure improvements

DON’T Worry About:

  • ❌ Daily P/L of $0.03 or -$0.14 (noise)
  • ❌ Being profitable every single day
  • ❌ Scaling Fibonacci yet (wait until profitable)
  • ❌ Going live with real money (paper trading until Month 4+)

Mindset Shift:

  • Old: “We need to make money TODAY”
  • New: “We’re building a system that makes $100+/day by Month 6”

R&D Phase Investments

Current Approach (October 31 - approved):

  • Invest ~$3-10/day via Fibonacci for testing
  • Focus: Collect data, test strategies, validate automation
  • Expectation: Break-even to small losses acceptable
  • Total R&D “cost”: ~$270 over 90 days (acceptable tuition fee)

If profitable during R&D: BONUS! Banking profits for future scaling. If break-even during R&D: EXPECTED! System learning, data collecting. If small losses during R&D: ACCEPTABLE! Building edge worth the tuition.

Current Challenge Status (Updated Live)

90-Day R&D Challenge: Day 2 of 90 (2% complete) - PAPER TRADING Start Date: October 29, 2025 Current Phase: Month 1 - Infrastructure + Data Collection Current P/L: +$0.02 (PROFITABLE - beating expectations!) System Status: ✅ Infrastructure solid, building trading edge

Current Positions:

  • SPY (Core ETF): +$0.03 profit (+0.18%) ✅
  • NVDA (Growth): +$0.01 profit (+0.48%) ✅
  • GOOGL (Growth): -$0.02 loss (-1.16%) ❌

Key Learnings (Compounding):

  • Day 1: System automation validated - SPY $6, GOOGL $2 (total $8 invested)
  • Day 2: Continued execution - SPY $6, NVDA $2 (total $8 invested)
  • Win Rate: 50% (2 winning trades, 1 losing trade, 1 neutral)
  • Pattern: Need momentum indicators - adding MACD + Volume confirmation
  • Next: Implement MACD + Volume system (Today - CTO executing)

Timeline:

Next Execution: Day 3 trades at 9:35 AM ET (October 31, 2025) Next Milestone: Day 30 - Month 1 R&D review