# Path-to-Profit Brief — 2026-06-26

> The weekly digest from Validated Strategies's 11-gate validation framework. We run trading strategies through 11 brutal gates, and publish every result — pass or fail.

**Scoreboard:** 1 validated · 2 surviving · 1 in paper · 14 retired/rejected · 2 inconclusive · 23 total.

## Latest verdicts

- **Cross-Exchange Funding Arbitrage** — `REJECTED` (PF 0.11). Variant retired — the placebo passes (g7) but only 3 of 11 gates clear overall. The cross-venue funding spread is real but too thin to survive execution costs in this configuration.
- **Liquidation-Cascade Fade** — `INCONCLUSIVE` (0/11 gates). Inconclusive — the available free data is too sparse to run the pre-registered test (0 of 11 gates evaluable). Not a no-edge finding; needs a denser liquidation feed.
- **Crabel NR7 + ATR Stop (v2)** — `QUEUED` (In progress). Pre-registered and currently in the gate battery — results published here, pass or fail.
- **Crabel NR7 Breakout (XAUUSD)** — `REJECTED` (PF 0.64). Passes 4 of 11 gates. The NR7 compression signal beats a random placebo (real PF 0.643 vs placebo p95 0.336) and walk-forward holds — but it is firmly unprofitable net of costs on gold: Sharpe −0.83, max drawdown −50.5%, positive in only 20% of years.
- **Pairs Trading ETH/BTC (Cointegration)** — `REJECTED` (PF 0.69). Placebo failed — 58% of random-sign permutations beat the real strategy. Only 46 trades in eight years, a −93% drawdown driven by the 2021 regime break, and in-sample PF 0.49 versus out-of-sample 1.34. The ETH/BTC cointegration relationship did not persist tradeably.

## ✅ Validated (1)

- **[Hyperliquid HLP Vault](https://validatedstrategies.com/strategy/hlp-vault)** — Sharpe 1.72. Clears the descriptive hurdle: Sharpe 1.72, PF 9.96, −5.8% max drawdown — roughly 2× BTC's return at half the volatility and an eighth of the drawdown. Qualifies as a benchmark and satellite allocation, with explicit directional and smart-contract risk caveats.

## 🟢 Surviving (under evaluation) (2)

- **[Turtle / Donchian Breakout](https://validatedstrategies.com/strategy/turtle-donchian)** — PF 1.61. Passes 9 of 11 gates. Profit factor 1.61, Sharpe 0.90, placebo PASS, deflated-Sharpe 0.997. It fails only on max drawdown (−49%) and instrument concentration (43%). A genuine trend edge — it survives, pending a risk re-scope before any capital.
- **[Variance Risk Premium (SPY / QQQ)](https://validatedstrategies.com/strategy/vrp-shortvol)** — PF 1.74. Passes 9 of 11 gates. Profit factor 1.74, Sharpe 0.86, 86% of months positive, placebo PASS, deflated-Sharpe 0.976. It fails only on max drawdown (−12.1%, just over the line) and leg concentration (51%). A real premium with a fat left tail — survives, pending tail management.

## 🟡 In paper window (1)

- **[Funding-Rate Harvest (Round 1)](https://validatedstrategies.com/strategy/funding-harvest-r1)** — placebo p95 0.003. The program's first mechanical (not structural) failure. The funding premium is real and wildly significant — placebo 95th percentile 0.003, ~13%/yr gross. The literal rebalance rule fails 4/8 gates on whipsaw transaction-cost drag. A re-pre-registered hold-continuous rule is now in a fresh paper window.

## 🔴 Rejected (5)

- **[Cross-Exchange Funding Arbitrage](https://validatedstrategies.com/strategy/funding-arb)** — PF 0.11. Variant retired — the placebo passes (g7) but only 3 of 11 gates clear overall. The cross-venue funding spread is real but too thin to survive execution costs in this configuration.
- **[Crabel NR7 Breakout (XAUUSD)](https://validatedstrategies.com/strategy/nr7-xauusd)** — PF 0.64. Passes 4 of 11 gates. The NR7 compression signal beats a random placebo (real PF 0.643 vs placebo p95 0.336) and walk-forward holds — but it is firmly unprofitable net of costs on gold: Sharpe −0.83, max drawdown −50.5%, positive in only 20% of years.
- **[Pairs Trading ETH/BTC (Cointegration)](https://validatedstrategies.com/strategy/pairs-eth-btc)** — PF 0.69. Placebo failed — 58% of random-sign permutations beat the real strategy. Only 46 trades in eight years, a −93% drawdown driven by the 2021 regime break, and in-sample PF 0.49 versus out-of-sample 1.34. The ETH/BTC cointegration relationship did not persist tradeably.
- **[Weekly Iron Condor (SPY)](https://validatedstrategies.com/strategy/iron-condor)** — PF 1.65. Variant retired — real edge, uninvestable sizing. The placebo passes decisively (PF 1.652 vs p95 1.345) so the variance premium is genuine, but a single $3k condor fails max-drawdown by a mile (−70.4%): one bad week can lose ~97% of the base. The edge is real; this expression is not.
- **[Scheduled-News Momentum (XAUUSD)](https://validatedstrategies.com/strategy/news-momentum)** — PF 1.13. The KILL-SHOT placebo PASSES. The post-release directional impulse carries

## ⚫ Retired archetypes (9)

- **[FX Carry (Hardened v2)](https://validatedstrategies.com/strategy/carry-hardened-v2)** — PF 0.84. Lost money over a full 15-year sample; the rate-ranked signal was beaten by 33% of random sign-permutations. v1's PF 1.17 was a 2023–26 subsample artifact. Carry retired.
- **[Basket-Grid (operator-forex-001)](https://validatedstrategies.com/strategy/basket-grid)** — PF 0.51. Blew the $5k account to the ruin floor in ~15 months. A zero-cost control pins the basket at PF 1.01 — a coin flip with no directional edge; real spread + slippage then bleed it to ruin.
- **[D1 Trend-Following (50/200 SMA)](https://validatedstrategies.com/strategy/d1-trend-follower)** — PF 0.94. Only gold made money (+$2,157); all seven FX majors lost. FX majors ranged rather than trended in 2018–2026, so a trend system had nothing to capture. Every parameter pair lands PF 0.91–0.99 and both out-of-sample halves lose — structural, not cost.
- **[NightMeanRevert EA](https://validatedstrategies.com/strategy/nightmeanrevert)** — PF 0.66. A disciplined, well-built clean-room EA with no edge. Fails 4 of 6 acceptance gates and misses the ≥200-trade prerequisite by ~8×. Price reverts to the band-center target only 21% of the time and stops out 66% — the mean-reversion thesis simply does not hold in the night window.
- **[TrendPullback EA](https://validatedstrategies.com/strategy/trendpullback)** — PF 0.80. The closest retail miss. It has the positive-skew signature a trend system should have (winners 1.22× losers) and trades plenty, but a 41.7% win rate where ~47% is breakeven. Right-shaped, wrong-calibrated — net-negative in every segment, pair, parameter neighbour, cost level and clock offset.
- **[Forex Fury V6 / CORE 1.4](https://validatedstrategies.com/strategy/v6-core-fury)** — net PF 0.73–0.90. Every configuration came in below profit factor 1.0 net of costs (0.73–0.90). A zero-cost control pins gross PF at ≈1.0 — a coin flip. The deployable edge is not in the parameters; same no-edge grid+martingale family as basket-grid.
- **[Opening Range Breakout (XAUUSD)](https://validatedstrategies.com/strategy/orb-xauusd)** — PF 0.93. Retire archetype — placebo failed. Just 2 of 11 gates: PF 0.93, Sharpe −0.20, −72.7% drawdown. The breakout signal does not beat a random-entry placebo on gold.
- **[Time-Series Momentum (XAUUSD)](https://validatedstrategies.com/strategy/tsmom-xauusd)** — PF 2.41. The most instructive result on the board. It passes 8 of 11 gates — PF 2.41, Sharpe 0.89, cost-robust — but fails the placebo kill-shot: a random long/flat schedule at the same base rate beats it. The "edge" is levered long-gold beta, not momentum. Archetype retired.
- **[Trend + Carry Overlay (G10)](https://validatedstrategies.com/strategy/trend-carry)** — PF 0.78. Retire archetype — 2 of 11 gates. The long-only trend + carry overlay on G10 does not clear the bar; the blend adds no durable edge over the components already retired.

## ⚪ Inconclusive (2)

- **[Liquidation-Cascade Fade](https://validatedstrategies.com/strategy/liq-fade)** — 0/11 gates. Inconclusive — the available free data is too sparse to run the pre-registered test (0 of 11 gates evaluable). Not a no-edge finding; needs a denser liquidation feed.
- **[pead](https://validatedstrategies.com/strategy/pead)** — PF 2.20. INCONCLUSIVE — not validatable on free data. It posts 9/11 on paper, but the placebo passes only at noise-level margin and the apparent drift is largely market beta in costume. A clean read needs paid IBES/Compustat earnings data.

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