October 1, 2026 – October 31, 2026
October 2026 rebalancing bot results: -15.68% vs BTC -8.47%
| Month | Max drawdown (month) | Cumulative at month end | |
|---|---|---|---|
| Rebalancing bot | -15.68% | -19.34% | -14.85% |
| BTC 100% hold | -8.47% | -10.90% | +21.56% |
| QQQ 100% hold | -6.66% | -8.81% | -6.39% |
Versus the same 25/25/50 start with no rebalancing: -5.24 pts
October was a bad month for my rebalancing bot. It lost 15.68% against 8.47% for bitcoin and 6.66% for QQQ, so it trailed both. The bot holds BTC spot at 25%, a 1x long SOXL perpetual at 25%, and 50% in USDT on Bybit. It checks hourly and rebalances when a weight drifts 2 percentage points or more from target. Cumulative return now sits at -14.85%, while bitcoin is at +21.56% and QQQ at -6.39%. I want to be upfront that this is not a flattering set of rebalancing bot results.
The month had 12 up days and 19 down days. The best day was October 2, when the bot gained 3.51%, bitcoin gained 3.13% and QQQ gained 1.41%. I have no note explaining that day, so I won't guess at the cause. It was simply a good day where the bot moved a bit more than bitcoin.
The worst day was October 30, when the bot fell 6.78%, against 3.94% for bitcoin and 2.25% for QQQ. SOXL did most of the damage. It dropped 21.53% over my daily window, from 102.12 to 80.13, which cost the bot 5.51 percentage points. Bitcoin's 4.89% fall cost another 1.19 points, and fees and funding took 0.08. The headlines I saw pointed to a weak forecast from Intel setting off a broad chip and tech selloff, with Intel down about 28%. Over the whole month SOXL went from 146.81 to 77.54, and bitcoin went from 83,823.3 to 77,393.4. The bot's portfolio is clearly more exposed to that chip move than to bitcoin.
Drawdown was the other painful number. The bot's maximum drawdown for the month was -19.34%, compared with -10.9% for bitcoin and -8.81% for QQQ. By the end of October 30 the worst drawdown so far was -21.24%. Holding half the portfolio in USDT was supposed to soften this, and it probably did, but a volatile asset falling this far still hurts.
On rebalancing itself, the bot made 18 trades: 13 buys and 5 sells. Fourteen were in SOXL and four in BTC. By my measure, the rebalanced portfolio finished 5.24 percentage points behind a buy-and-hold portfolio that started at the same 25/25/50 weights. So this month, rebalancing cost me. The reason is simple. As SOXL fell, its weight dropped below target, and the rule kept buying more. On October 30 it made two SOXL buys, at 05:59 and 23:59. Shannon's demon, the idea that regularly rebalancing volatile assets can add return, tends to work in choppy markets that go up and down. It works less well when an asset keeps falling in one direction. The weights at month end were BTC 25.06%, SOXL 24.36% and USDT 50.58%, so the bot is back near target, but at a lower account value.
My lesson is that a rebalancing rule has no view on whether a drop is a dip or the start of something worse. It did what I designed it to do, and the result was still worse than doing nothing. I can't tell from one month whether those SOXL purchases will look smart or foolish later. What I can say is that pairing bitcoin with a SOXL position, and calling it diversified, does not protect you when the chip sector sells off hard. I'm keeping the rules unchanged for now and will keep reporting the results, including the bad months like this one.
Daily entries this month
How rebalancing works: Shannon's Demon →
Methodology
Total equity is logged by the bot every hour at :59. Deposits are removed at the hour they arrive and returns are chained as a time-weighted return (TWR). Daily return compares the last snapshot of the day with the previous day's last snapshot. Benchmarks use Bybit BTCUSDT spot and QQQUSDT perpetual hourly closes.
This site is a personal record, not investment advice. Past performance does not guarantee future results.