Heatmaps
Last updated
Last updated
The Heatmaps feature in FireForge provides an advanced visualization of key performance metrics across a wide range of strategies and conditions, allowing users to quickly assess and compare the robustness and effectiveness of different strategies.
Heatmaps are available for each metric and display performance across various VIX levels, strategy types, and settings, providing a comprehensive view of how strategies fare under changing market conditions.
Metric-Specific Visualizations: FireForge’s heatmaps allow users to select individual metrics (such as CEM, return on Buying Power Requirement, Winrate, etc.) and view a visual representation of these metrics across strategies. Each cell in the heatmap represents a specific strategy's performance for that metric within a selected VIX range.
For example, users can view heatmaps for Return on BPR, CEM, Standard Deviation, and other relevant metrics, enabling them to see where strategies are strongest or weakest in various volatility conditions.
Strategy Type Segmentation: Separate heatmaps are available for different strategy types, including puts, calls, and condors. This segmentation allows users to analyze metrics within each strategy type independently, highlighting the relative performance of put spreads versus call spreads, for instance.
VIX Range Dependency: Heatmaps visualize how strategy metrics shift across different VIX levels, offering insights into which strategies are best suited for specific volatility conditions. For instance, users may find that certain put spreads perform better in low VIX ranges, while condors excel in high VIX conditions.
Identifying Consistent Performers: By comparing performance across various metrics in a single view, heatmaps help users identify strategies that consistently perform well across multiple conditions. This ability to spot robust strategies at a glance is particularly useful for traders seeking stable returns.
Fine-Tuning Strategy Selection: Heatmaps provide a detailed view of performance changes across VIX levels, allowing users to select strategies tailored to their preferred market conditions. For example, a user aiming to trade only in calm markets could focus on strategies that perform well at low VIX levels, as visualized in the heatmaps.
Visualizing Volatility Sensitivity: Heatmaps make it easy to see how sensitive different strategies are to market volatility. Users can identify strategies that are less impacted by volatility shifts, making them more versatile across changing conditions.
Practical Applications
Selective Execution Based on Market Conditions: Heatmaps allow users to tailor strategy execution based on VIX levels by showing which strategies excel in specific volatility environments. For instance, users can select strategies that perform well in high-VIX environments for times of market stress, or low-VIX strategies during calm periods.
Comparative Analysis Across Strategy Types: By viewing separate heatmaps for puts, calls, and condors, users can compare the relative performance of each strategy type. This insight can inform decisions about which strategy type to prioritize based on current or expected market conditions.
Refining Multi-Metric Criteria: Heatmaps allow users to assess multiple metrics simultaneously, helping them refine their criteria when choosing strategies. A user might want a strategy with high CEM, Winrate, and low Drawdown; heatmaps make it easy to visualize which strategies meet all these conditions in the desired VIX range.
Suppose a user is looking for income strategies with high Winrate and Return on BPR but minimal Drawdown across stable market conditions (e.g., VIX 10–15). By analyzing the heatmaps, they can quickly identify strategies that show high stability and profitability within that specific VIX range.
Heatmaps enable the user to not only select the most suitable strategies but also visualize how performance would shift if market volatility rises above 15. This insight allows them to adjust their approach dynamically as conditions change.
Interpreting Color Gradients: Darker or brighter colors typically represent stronger metric values. Pay attention to color gradients as an indication of where performance peaks or dips across the selected VIX ranges.
Comparing Metrics Across Strategies: Use the heatmaps to directly compare metrics like Winrate and CEM across various strategies, helping pinpoint the most resilient strategies.
Targeted Filtering: Apply VIX and strategy type filters alongside the heatmaps to narrow down choices. Combining heatmap insights with custom filters enables precise, data-driven strategy selection.