NhugaNhuga

Full transparency

Verification methodology

Every strategy on Nhuga must earn its status. These are the exact rules we use to promote strategies from Incubation to Verified and from Verified to Elite. No exceptions, no shortcuts.

To Verified
16 criteria
To Elite
14 criteria
Last updated
31st Aug, 2026
Stage 1

Incubation

Strategies enter live-market testing after passing internal research and backtesting standards. This is the proving stage, with no guarantee of promotion.

Stage 2

Verified

A strategy that has completed incubation and shown that its performance, risk and behavior meet our predefined standards in live markets.

Stage 3

Elite

A strategy with strong historical performance across backtest, live incubation and sustained live results. It can be promoted straight from Incubation if it exceeds the Elite criteria.

Mandatory

Must be met. Failure blocks promotion regardless of other metrics.

To calibrate

Threshold is set but may be adjusted as we gather more live data across strategies.

Review

Evaluated during the final review. Material deviation may block promotion at Nhuga's discretion.

Incubation → Verified

A strategy must pass every mandatory criterion and satisfactorily meet the calibration and review criteria below to be promoted from Incubation to Verified.

10 mandatory3 to calibrate3 review

  • 01Minimum Incubation Period

    Mandatory

    Rule30 calendar days minimum

    Ensures the strategy experiences real market conditions over sufficient time

  • 02Minimum Live Trades

    To calibrate

    Rule10 completed trades minimum

    Prevents promotion based on an extremely small sample

  • 03Live Net Return

    Mandatory

    RulePositive net return at end of incubation

    Strategy must demonstrate actual profitability in live trading

  • 04Maximum Daily Drawdown

    Mandatory

    Rule≤ 5%

    Controls daily risk

  • 05Maximum Overall Drawdown

    Mandatory

    Rule≤ 10% during incubation

    Controls cumulative risk

  • 06Live Profit Factor

    To calibrate

    Rule≥ 1.20

    Ensures gains meaningfully outweigh losses

  • 07Live vs Backtest Behavior

    Mandatory

    RuleNo material/unexplained deviation from expected behavior

    Confirms the live strategy behaves like the tested strategy

  • 08Trade Frequency

    Mandatory

    RuleWithin an acceptable range of backtest expectations

    Detects abnormal live behavior

  • 09Win Rate

    Review

    RuleWithin an acceptable deviation from backtest

    Helps detect strategy degradation

  • 10Average Trade

    Review

    RuleNo material unexplained deterioration

    Detects weakening edge

  • 11Maximum Consecutive Losses

    Review

    RuleWithin an acceptable range of historical expectations

    Measures behavioral consistency

  • 12Single-Trade Dependency

    To calibrate

    RuleNo single trade should account for >50% of total live profit

    Prevents one lucky trade from validating the strategy

  • 13Execution Integrity

    Mandatory

    RuleNo material system/execution errors affecting results

    Ensures we're evaluating the strategy, not technical failures

  • 14Discretionary Intervention

    Mandatory

    RuleNo manual intervention in strategy decisions

    Keeps the live test objective

  • 15Data Integrity

    Mandatory

    RuleAll live trades/P&L/drawdown data must be accurately recorded

    Ensures the verification is based on reliable evidence

  • 16Final Verification Review

    Mandatory

    RuleNhuga reviews the completed incubation results before promotion

    Prevents automatic promotion based only on raw metrics

Promotion to Elite

Elite status requires a higher performance benchmark while keeping strict risk and consistency standards. A strategy can reach Elite directly from Incubation or progress from Verified.

11 mandatory2 to calibrate1 review

  • 01Minimum Live Period

    Mandatory

    RuleMinimum 30 calendar days in live incubation

    Gives the strategy meaningful live-market exposure

  • 02Minimum Live Trades

    To calibrate

    RuleMinimum 10 completed trades

    Prevents exceptional results from a tiny sample

  • 03Live Return

    Mandatory

    RuleMust exceed the Elite Return Benchmark

    This is what makes the promotion exceptional

  • 04Profit Factor

    Mandatory

    RuleMust meet the Elite PF benchmark

    Confirms quality of profits

  • 05Maximum Daily Drawdown

    Mandatory

    RuleMust remain ≤ 5%

    Protects against excessive daily risk

  • 06Maximum Overall Drawdown

    Mandatory

    RuleMust remain ≤ 10% during incubation

    Ensures exceptional return isn't produced through excessive risk

  • 07Consistency

    Mandatory

    RulePerformance cannot be primarily generated by one trade or very short period

    Prevents statistical outliers

  • 08Single-Trade Contribution

    To calibrate

    RuleNo single trade should account for an excessive portion of total profits

    Prevents one lucky trade from triggering Elite

  • 09Live Trade Distribution

    Review

    RuleProfits should be distributed across a meaningful number of trades/periods

    Establishes repeatability

  • 10Live vs Backtest Behavior

    Mandatory

    RuleNo material unexplained deviation in core strategy characteristics

    Confirms the live strategy still behaves as expected

  • 11Execution Integrity

    Mandatory

    RuleNo material technical/execution errors affecting results

    Separates strategy performance from infrastructure errors

  • 12Rule Compliance

    Mandatory

    RuleNo discretionary/manual intervention

    Keeps the incubation test objective

  • 13Risk Stability

    Mandatory

    RuleNo abnormal deterioration in risk characteristics

    Elite cannot be achieved through temporary uncontrolled risk

  • 14Final Elite Review

    Mandatory

    RuleNhuga performs a final quantitative + qualitative review

    Prevents automatic promotion from a single metric

Important notes

  • Strategy status is not permanent. If performance or risk characteristics deteriorate, a strategy can be demoted or retired.
  • A strategy that fails during its initial incubation does not simply get recycled back into incubation.
  • “To calibrate” thresholds are published as proposed values. As more strategies complete incubation, these thresholds may be refined.
  • Past performance, whether in backtesting or live incubation, is not indicative of future results. Trading involves substantial risk of loss.

These criteria apply to all strategies entering or currently in incubation. See our full disclaimer for important risk disclosures.