Default Setup
Core (don’t touch): 60–70% MSTR
- Normal: 70%
- Exception (“strong green booster”): Temporarily 60% if trends are very strong (see below).
Satellite (you adjust weekly): 30–40% spread across:
- MSTX = growth “juice”
- MSTY = income in chop/high IV
- WNTR = crash “airbag” only in downtrends
Friday 5-Minute Check (use daily charts)
MSTR trend: Is price above both the 20-day and 50-day MAs?
BTC trend: Is BTC above its 50-day MA?
Trend strength: Is ADX(14) on MSTR > 25? (Stronger trend if >30.)
Momentum: RSI(14) on MSTR
- >70 = hot/overbought
- < 30 = washed-out/oversold
Volatility (IV): MSTR 30-day IV percentile
- >60% = high, >80% = very high
- No IV feed? Use a proxy: wide Bollinger Bands + fat MSTY yield ⇒ treat as high IV.
Damage check: Last 10 trading days for MSTR: ≤ −8% = nasty drop
Traffic Light for Next Week
GREEN (bullish): MSTR above 20 and 50; BTC above 50; ADX > 25.
RED (bearish): Any of:
- MSTR below 50 or
- 10-day drop ≤ −8% or
- (BTC below 50 and ADX > 20)
YELLOW (sideways): Anything else.
Position Sizing for Next Week
0) Satellite Size (total bucket for MSTX/MSTY/WNTR)
Default: 30% of portfolio.
Boost to 40% (take 10% from MSTR so core = 60%) only if:
- This week is GREEN, last week was also GREEN, and ADX > 30.
Revert to 30% the moment we lose GREEN.
WNTR (airbag) — only in RED
If NOT RED: WNTR = 0%.
If RED:
- Put 2% of the whole portfolio into WNTR.
- If the 10-day drop ≤ −10%, increase WNTR to 5%.
Exit WNTR at the earlier of:
- 2 weeks held, or
- Any week MSTR closes +5% or more.
2) Split the Satellite: MSTX vs. MSTY
Think of this as a slider. More MSTX when the trend is strong and clean. More MSTY when it’s choppy or IV is high.
If GREEN
- Base idea: Tilt heavily to MSTX.
- If IV > 60%, keep some MSTY (5–10% of satellite) for income.
- If RSI > 70 (too hot), cap MSTX at ~70% of satellite and put the rest in MSTY.
- If “strong green booster” is on (satellite = 40%), same logic — just a bigger bucket.
Quick fills:
- GREEN & normal IV: MSTX 80–100% of satellite; MSTY 0–20%
- GREEN & high IV or RSI > 70: MSTX 50–70%; MSTY 30–50%
If YELLOW (sideways/chop)
- Favor MSTY.
- Keep MSTX small (0–20% of satellite); only add more after a few strong green days back-to-back.
Quick fill:
- MSTY 80–100% of satellite; MSTX 0–20%; WNTR 0%
If RED (downtrend)
- MSTX = 0%
- WNTR = 2–5% (per the rule above)
- MSTY = whatever’s left of the satellite after WNTR
Safety Rails (Don’t Skip)
- Weekly rhythm: Set weights at Friday close → trade Monday.
Only change mid-week if we flip GREEN ↔ RED. - MSTX trailing stop: If your MSTX slice drops 10% from its recent weekly high, sell MSTX and move that amount into MSTY for the rest of the week.
- Ex-date tip (tax/flow friendly): If IV > 60% and MSTY ex-date is this week, don’t go to zero MSTY — keep some to catch the distribution.
Tiny Examples
- Clean bull: GREEN, ADX 27, IV 55, RSI 62
→ Satellite 30%; MSTX ~90% of satellite, MSTY ~10%, WNTR 0%. - Hot, frothy bull: GREEN, ADX 33 (2+ weeks), IV 75, RSI 74
→ Satellite 40%; MSTX ~60–70%, MSTY 30–40%, WNTR 0%. - Chop with high IV: YELLOW, IV 85
→ MSTY ~90–100% of satellite, MSTX 0–10%, WNTR 0%. - Downtrend shock: RED, 10-day −11%
→ WNTR 5% of total; MSTX 0%; rest of satellite in MSTY.
Time-box WNTR for 2 weeks or until a +5% weekly MSTR bounce.
Simulated backtesting results by LLM
Backtest Results (v2)Over the 19.5-month period, v2 returned 94.2% on the full portfolio.
- Ending portfolio value: $194,200.
- Maximum drawdown: -25.2% (during Q2 2024 red period).
- Number of rebalances: 78 (weekly, minus some skipped on no-change).
- Signal distribution: Green ~48% of weeks (up from v1’s 45% due to faster MAs), Yellow ~38%, Red ~14%.
- WNTR usage: Activated 8 times (brief reds), average hold 1.4 weeks, contributed ~1.2% to total return via hedging/income.
- Trailing stop hits: 6 times, mostly in choppy greens, reducing volatility.
Key improvements in action:
- Dynamic satellite (40% in strong greens): Boosted gains in persisting rallies (e.g., Q1 2024, hypothetical Q3 2025).
- Tanh-based trend score + ADX gate: Smoother MSTX scaling, avoiding over-allocation in weak trends.
- RSI bump + IV penalty: Tempered euphoria (e.g., reduced MSTX in overbought/high-IV peaks), added bounce exposure in yellows.
- Tighter WNTR: Limited to 2–5%, time-boxed, softened reds without drag.
Dynamic MSTR / MSTX / MSTY / WNTR strategy was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.
