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Strategy Configuration Guide

Overview

This guide explains how to configure Infinity Algo V3.0's backtest settings for different trading styles. While AI Optimization can automatically find optimal parameters, understanding manual configuration helps you align the strategy with your specific goals.

Trading Approaches

🤖 AI-Optimized Trading (Recommended)

For most users, simply:

1. Enable AI Optimization

2. Select your Performance Metric (Total Profit, Win Rate, Sharpe Ratio, etc.)

3. Choose AI or AI Sniper signal mode

4. Let the algorithm find optimal settings

The AI will automatically adjust sensitivity and thresholds based on recent market conditions, eliminating guesswork.

🎯 Manual Configuration

For traders who prefer direct control or want to test specific hypotheses, the following sections explain each configuration option.

Exit Types Explained

Percentage Exit

How it works: Positions close at predetermined profit/loss levels.

Configuration:

• Set up to 6 Take Profit levels (TP1-TP6)

• Define exit percentages for each TP (must total 100%)

• Configure Stop Loss percentage

Example Setup - Conservative

• TP1: 1% profit, exit 50% of position

• TP2: 2% profit, exit 30% of position

• TP3: 3% profit, exit 20% of position

• SL: 2% loss on full position

Best for: Consistent profit-taking, risk management, scalping

Signals Exit

How it works: Positions close when specific technical conditions are met, allowing profits to run during strong trends.

Configuration:

• Enable "Use Take Profit Signals"

• Choose whether to exit only on higher profit levels

• Set minimum profit offset before signals activate

Key Features:

• Exits adapt to market momentum

• Can capture larger moves than fixed percentages

• Multiple partial exits as trend weakens

Best for: Trend following, momentum trading, volatile markets

Opposite Signal Exit

How it works: Positions close only when an opposite direction signal appears.

Example:

• Long position closes on next Sell signal

• Short position closes on next Buy signal

Characteristics:

• Maximum position duration

• Full trend capture potential

• Higher risk/reward variance

Best for: Strong trending markets, longer timeframes, experienced traders

Position Management

Pyramiding (Adding to Winners)

What it is: Building larger positions as trades move in your favor.

Settings:

• More Entries Allowed: Enable to add to existing positions

• Pyramiding: Set maximum position additions (1-10)

Example Pyramiding Strategy

• Initial Entry: 25% of capital

• Add 1: +1% profit, add another 25%

• Add 2: +2% profit, add another 25%

• Add 3: +3% profit, add final 25%

Risk Consideration: Pyramiding increases exposure, so ensure proper risk management.

Stop Loss Configuration

Types:

• Fixed Percentage: Same SL for all trades

• Dynamic: Adjust based on volatility (when using Signals exit)

Testing Your Configuration

Step-by-Step Process

1. Baseline Test: Run your configuration on the last 6 months

2. Stress Test: Check performance during known volatile periods

3. Robustness Check: Test on different symbols/markets

4. Sensitivity Analysis: Slightly adjust parameters to ensure stability

5. Forward Test: Paper trade for at least 2 weeks

Key Metrics to Monitor

Essential Metrics

• Win Rate vs Profit Factor: High win rate doesn't guarantee profitability

• Maximum Drawdown: Can you psychologically handle the losses?

• Recovery Time: How long to recover from drawdowns?

• Trade Frequency: Does it match your availability?

• Risk/Reward Ratio: Aim for minimum 1.5:1

Common Pitfalls to Avoid

Don't Make These Mistakes

• ❌ Over-optimizing for historical data

• ❌ Ignoring transaction costs in calculations

• ❌ Using too tight stop losses for the timeframe

• ❌ Pyramiding without proper risk management

• ❌ Changing settings after every loss

Pro Tips

Best Practices

• 💡 Start Conservative: Begin with wider stops and smaller positions

• 💡 Match Your Schedule: Don't day trade if you can't monitor positions

• 💡 Consider Correlations: Reduce position sizes for correlated assets

• 💡 Document Everything: Keep a log of what works and why

• 💡 Trust the Process: Give strategies at least 30-50 trades before judging

Frequently Asked Questions

Should I use the same settings on all timeframes?

No, each timeframe has different characteristics. Lower timeframes need tighter stops and quicker profits. Higher timeframes can use wider stops and larger profit targets.

When should I use Signals vs Percentage exits?

Use Percentage for consistent, predictable results. Use Signals when you want to capture larger moves and can tolerate more variance in your results.

How many pyramiding entries should I use?

Start with none, then gradually add 1-2 as you gain experience. More than 3 is generally only for experienced traders with strong risk management.

Can I combine manual settings with AI?

The AI overrides sensitivity/threshold settings but respects your exit type, TP/SL levels, and pyramiding choices. This gives you the best of both worlds.

What's the best exit type for beginners?

Start with Percentage exits as they're more predictable. Once comfortable, experiment with Signals exit to potentially capture larger moves.

How do I know if my settings are over-optimized?

If small parameter changes drastically affect results, or if live performance differs significantly from backtests, you're likely over-optimized.

Conclusion

While AI Optimization handles the complex parameter selection, understanding these configuration options helps you:

• Align the strategy with your risk tolerance

• Match your trading schedule and style

• Set appropriate profit targets and stops

• Manage positions effectively

Remember: The best configuration is one you can follow consistently, not the one with the highest backtest returns.

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Next Steps: Once you've configured your settings, proceed to our Backtesting Best Practices guide to learn how to properly evaluate your strategy's performance.