EPIC AI Trading Protocols In The Context of Extreme Volatility on October 10, 2025

The Friday, Oct 10, 2025 trading session delivered extreme market volatility—nearly 5% decline on Nasdaq with near record-high volatility-of-volatility readings. Despite reaching maximum stress levels (~12% drawdown on Velocity at session lows, while Balanced was in the range of 5-7% and Foundational was around 2-3%), EPIC remained within target risk parameters and closed profitably on all protocols. This outcome demonstrates system resilience under headline driven conditions that have caused failures in other quantitative funds during 2025. The following is an overview highlighting key differences in the EPIC protocols when faced with such volatility.

System Architecture Overview

EPIC AI is a quantitative trading system designed for high-volatility instruments, including Nasdaq futures. The platform uses algorithmic positioning with three protocol tiers:

Foundational Protocol (900-Contract Framework, $35M NQ account size)

Structure: Algorithmic 3-6-9 progression scaling
Objective: Market-beating returns through precise position management
Risk Profile: Near-zero probability of sustained drawdowns under any market condition
Philosophy: Treats markets as adaptive event sequences, not static start-to-finish models, continuously working positions into profitable outcomes.

Balanced Protocol (320-Contract Framework, $1M MNQ account size, $10M NQ)

Configuration: Emulates 900-contract structure with some size constraints
Trade-off: Lower total ROI versus Foundational, but maintains high loss-avoidance efficacy
Use Case: More widely accessible than the $35M account size of the Foundational Protocol

Velocity Protocol (100-Contract Framework, highly versatile for account sizes starting at $100k)

Configuration: Functionally 9 contracts with reduced reserve capacity while still utilizing the core principles of the foundational protocol
Characteristics: Higher returns at times over full market cycles, with elevated day-to-day volatility
Use Case: Access to potentially outsized returns for account sizes under the Balanced Protocol requirements
Key Stress Levels based on hold size:
- 9-18 contracts: Minimal stress
- 27 contracts: Moderate stress (especially in divergent markets)
- Above 27 contracts: Higher stress and requires careful deployment and pivot-based deployment where contracts will not be held if conditions are not favourable with EPIC’s criteria

Risk Management: Backfill (Pivot) Mode

Backfill mode is EPIC’s systematic recovery mechanism, deployed when standard protocols face significant stress. It is a critical piece that separates EPIC from other quant funds as it has never failed to repair a loss within a tight time frame in its five years since development:

Function: Repairs drawdowns expeditiously by deploying contracts at key support/resistance levels
Activation: Particularly relevant for the Velocity Protocol during extreme conditions
Pivot Criteria: System cuts positions quickly if price action fails confirmation criteria, thus pivoting in and out until profitable footing is found
Costs: Incurs slippage and additional brokerage fees when moving in and out of positions

Friday’s Performance Context

Market Conditions:

Near 5% market decline
Extreme volatility-of-volatility readings (one of the highest readings we have recorded)
- A key metric that we use to evaluate how much systemic stress EPIC is managing
Velocity accounts reached ~12% drawdown at session lows, Balanced reached ~7%

System Response:

All positions remained within maximum drawdown parameters
No liquidation required (Velocity would have triggered cutting positions and backfill mode below Friday’s low)
Closed trade profitably despite maximum stress conditions for Velocity. Balanced and Foundational had no significant stress throughout due to their larger reserves and generated very large wins.

Drawdown Framework:

Normal stress range: 4-7%
Maximum normalized drawdown risk (Velocity): ~12% (not a hard cutoff but rather an approximate target)
Friday’s outcome: Price reversed at maximum threshold but within the design parameters

Investment Perspective

Core Value Proposition: EPIC functions as an asymmetric return vehicle and portfolio diversification tool—a hedge against broader market risks with the potential for outsized returns.

Performance Expectation: The system is engineered for probabilistic outperformance, winning a majority of trade sequences even when initially misaligned with market direction. This does not mean EPIC is always on the correct side of trades but rather that even in the worst case scenarios it can work itself into a position to win or repair losses quickly if needed using the backfill strategy. Performance varies by protocol:

Velocity: High return potential, highest volatility, may have stretches where it lags the other protocols due to challenges with market conditions but will also have stretches of very steep gains
Balanced: Consistent, high returns, controlled volatility regardless of market conditions
Foundational: Optimal risk-adjusted returns in all conditions

Allocation Guidance: Portfolio allocation should reflect personal volatility tolerance. We recommend monitoring account-specific metrics via the EPIC dashboard and consulting with our team for personalized guidance.

Risk Disclosure

Past performance is not indicative of future results. Trading futures contracts involves substantial risk of loss and is not suitable for all investors. Market conditions, including volatility, can change rapidly, and there is no guarantee that the system’s protocols will perform as expected.

Investors should conduct their own due diligence, consider their financial situation and risk tolerance, and consult with qualified financial advisors before licensing or utilizing EPIC. EPIC AI and its affiliates disclaim any liability for losses incurred through the use of this software.