New Settings Unlocked: The 8th Rule for Ethereum ($ETH)

What a week.

It’s been deeply satisfying to sit 100% in cash watching everyone on X and the many Discords I’m in hypothesize about geopolitical game theory, landlocked oil fields in Russia, trying to make portfolio decisions around the insane mess that is the current macro landscape.

That is WHY I built these systems and that is WHY I have no issue sleeping at night, no doomscrolling, no worrying about what may or may not happen.

I can keep sharpening my blades with full confidence that the MRE and 8th Rule will let me know when the coast is clear.

Settings below:

    'hma_length': 45,
    'gaussian_length': 50,
    'gaussian_sigma': 15,
    'atr_length': 24,
    'atr_factor': 0.85,
    'sd_length': 27,
    'use_ema': True,
    'ema_length': 67,
    'bull_thresh_pct': 0.5,
    'bear_thresh_pct': -2.0,
    'confirm_bars': 1,
    'vats_fast_len': 30,
    'vats_slow_len': 90,
    'vats_bull_thresh': 0.15

Now on to the fun part.. I did a bit of initial exploration as to how the overall portfolio composition would be affected by including ETH as a sleeve.

After running a few different sweeps, the optimal split came back as a 50/20/20/10 allocation.

• 50% SPY

• 20% BTC (-5% reduction)

• 20% Gold (-5% reduction)

• 10% ETH (new)

This setup wins on both Sharpe (2.68) and Sortino (3.56) while keeping max DD at just -6.9%. That's the best risk-adjusted split in the entire sweep. Adding ETH at 10% while trimming BTC and Gold by 5% each gets you the diversification benefit without the vol blowup.

Worth noting.. the 8th Rule is currently signaling a 25% position long on $ETH. I am NOT implementing any of these portfolio changes just yet.. more exhaustive testing is needed before I commit capital. Take it for what it's worth.

Next up on my list is $SOL.

Some initial testing has had excellent results but it’s important to note that Solana is a relatively newer asset class with only 6 years of price history. I’ll write up another post next week.

— Durden out. ✊🧼

Not financial advice. Trading equities and futures involves substantial risk of loss. Past performance does not guarantee future results. Backtested performance has inherent limitations and does not reflect actual trading. The author is not a licensed financial advisor. Always do your own research and consult a qualified professional before making investment decisions. You are solely responsible for your own trading decisions.

Manage risk. The market’s real engine is liquidity.