Curriculum·R404 Execution and Trade Craft·about 33 min
Entry models
By the end of this lesson you can
- →Separate the three families of entry model by the source of the edge each one claims
- →Explain why a dated, universally known catalyst is the weakest entry signal available
- →Compute how entry quality changes position size at constant risk
- →State the test any entry model must pass before it is worth trading
Senior · enrolled learners
This lesson opens with The CME futures launch, 17 and 18 December 2017.
- What happened
- CME Group self-certified its bitcoin futures contract on 1 December 2017 and launched it on Monday 18 December. The launch was universally known in advance and was widely presented as the arrival of institutional capital. Bitcoin rose steeply through the intervening weeks, from around $10,975 on 30 November to about $19,500 on 14 December, and peaked at roughly $19,511 on 17 December, the day before the contract began trading. It fell to around $6,000 by July 2018. A Federal Reserve Bank of San Francisco Economic Letter published in May 2018 argued that the introduction of futures gave pessimists a practical way to express a view for the first time, and noted that the decline following the launch was larger than the two previous reversals.
- The decision point
- The entry signal was a date on a calendar that everybody could see. Nothing about it was wrong as a fact, and the institutional infrastructure it represented did arrive. What it could not be was an edge, because an edge is a difference between what you know and what the price already reflects, and a scheduled event announced seventeen days in advance is in the price. The mechanism the launch actually introduced was the ability to sell.
What you will be able to answer
- →What are the three families of entry model?
- →Why is a dated public catalyst weak?
- →How does entry quality change size?
- →What test must an entry model pass?
Orientation and Year One are open: anyone can read them without an account. From Year Two onward the lessons are for enrolled learners, because progress through the later years only means anything if it is tracked against a record.
It is free. We do not sell the list and there is nothing to buy at the end of it.
Sources and review
- https://www.frbsf.org/research-and-insights/publications/economic-letter/2018/05/how-futures-trading-changed-bitcoin-prices/
- https://www.cmegroup.com/media-room/press-releases/2017/12/01/cme_group_self-certifiesbitcoinfuturestolaunchdec18.html
- https://www.cnbc.com/2017/12/17/worlds-largest-futures-exchange-set-to-launch-bitcoin-futures-sunday-night.html
- https://www.sec.gov/files/marketevents-report.pdf
Confidence medium·Volatility low·Reviewed 2026-08-07·Owner unassigned
Contested
Peak prices for December 2017 differ by venue, with roughly $19,511 and roughly $19,783 both widely cited depending on the exchange and the index. The date of 17 December and the coincidence with the launch are consistent across sources and the exact figure is not load bearing.
The San Francisco Fed's argument that futures availability enabled pessimists to express views is one credible explanation among several, and other analysts have argued the launch was coincidental to a reversal that was already due. Per P6 this lesson presents it as a documented interpretation rather than a settled cause, and the entry lesson holds under either reading.
R405 owns strategy development and the statistical testing of any rule. This lesson owns the taxonomy of entry models and the question of where an edge comes from. Keep the split and do not derive a backtest here.