Methodology

ZenWave engines are built using AI-accelerated Walk-Forward Analysis — a structured framework that prioritises out-of-sample validation over in-sample curve-fitting.

AI-Accelerated Research

ZenWave uses a dual-AI research pipeline. AI is employed as a co-researcher — never as a black-box decision-maker. The system leverages:

Builder AI

Generates strategy candidates, assists with feature exploration, and accelerates the hypothesis-to-code cycle.

Auditor AI

Independently reviews Walk-Forward results, checks for overfitting signals, and validates procedural integrity.

Every critical decision — engine selection, parameter acceptance, risk allocation — is made by the human researcher. AI accelerates discovery; it does not govern deployment.

Walk-Forward Analysis (WFA)

Walk-Forward Analysis is the gold standard for validating algorithmic trading strategies. It divides historical data into sequential in-sample (IS) and out-of-sample (OOS) periods:

  1. Optimise on the IS window to find candidate parameters.
  2. Test those parameters on the unseen OOS window — the only performance that counts.
  3. Roll forward the window and repeat across all slices.
  4. Stitch OOS segments to construct a synthetic track record that no single optimisation could produce.

ZenWave engines use multi-slice anchored WFA. Each engine has multiple slices (A1–A4, B1–B5) to assess parameter stability and regime resilience.

Why USD/JPY?

The entire ZenWave system targets a single instrument: USD/JPY. This is not a limitation — it is a deliberate design choice grounded in five structural advantages:

  • Macro Divergence — USD/JPY reflects the BoJ / Fed policy divergence, producing sustained directional moves ideal for trend-based strategies.
  • Session Volatility — Tokyo → London transitions generate reliable intra-day expansion patterns.
  • Carry Trade Dynamics — Long-standing interest-rate differentials create asymmetric flow behaviour around risk events.
  • Liquidity & Depth — As the second-most traded pair globally, slippage is minimal and execution is reliable.
  • Low Noise, High Signal — Compared to EUR/USD or GBP/JPY, USDJPY exhibits cleaner trending patterns and lower whipsaw frequency.

Focusing on a single pair removes cross-pair noise, avoids correlation overlap, and allows every engine component to be tuned for the specific micro-structure of one market.

Risk Controls

All risk boundaries are fixed before deployment and never adjusted in response to live drawdowns. The framework includes:

Shared Risk Cap

Total portfolio risk capped at 0.50% per trade cycle, split equally across active engines.

Engine Isolation

A and B run independently. A drawdown in one engine does not trigger adjustments in the other.

No Manual Override

No discretionary intervention. Every trade is generated, managed, and closed by the engine.

Portfolio Architecture

ZenWave deploys a multi-horizon portfolio rather than a single strategy. Each engine targets a different time-horizon:

ZenWave ALong-term12-year structural breakouts
ZenWave BMedium-termAdaptive drift capture
ZenWave CShort-termSession volatility bursts (2026)

Multi-horizon diversification reduces decay risk, broadens regime coverage, and mirrors institutional portfolio design.

Validation Philosophy

Everything published — every claim, every chart, every performance statistic — is backed by reproducible, auditable evidence. ZenWave follows four non-negotiable principles:

No Hindsight

Performance is measured only on out-of-sample data. In-sample numbers are never reported as expected performance.

Full Transparency

WFA slices, parameter ranges, and OOS equity curves are published on YouTube and in quantitative reports.

Third-Party Verification

Live results are tracked on cTrader Copy — publicly visible balance, equity, and trade history.

Dual-AI Audit

An independent AI reviews validation procedures and checks for procedural errors or overfitting signals.