Strategy Lifecycle
The strategy lifecycle defines how every strategy moves through KEK — from initial idea to optional execution.
KEK enforces a structured lifecycle to ensure strategies are validated, monitored, and refined before any capital is deployed. Strategies are treated as hypotheses that must earn eligibility for execution through measurable performance and risk evaluation.
Execution is optional. Validation is not.
What this page covers
- Strategy generation
- Validation stages
- Monitoring and refinement
- Optional execution
- Custody boundaries
The strategy lifecycle
KEK follows a fixed lifecycle designed to reduce risk, discourage premature execution, and support long-term strategy development.
Each stage has a specific responsibility. No stage bypasses validation.
1) Strategy generation (KEK Mix)
Strategies begin as structured strategy specifications generated through KEK Mix.
Each candidate strategy defines:
- Rules
- Indicators
- Params
- Objectives
At this stage:
- No capital is involved
- No execution occurs
- No live trades are placed
Output: a candidate strategy (hypothesis), expressed as a machine-readable specification — not an executable trading system.
KEK Mix produces strategy intent, not trades.
2) Backtesting & optimization (historical validation)
Candidate strategies are evaluated against historical market data to determine whether they are viable under past conditions.
Backtesting is the practice of simulating a trading strategy using historical data to analyze risk and performance before risking capital.
This stage focuses on:
- Risk-adjusted performance
- Drawdown behavior
- Trade consistency
- Parameter sensitivity and robustness
- Failure modes under adverse conditions
Strategies are refined through parameter tuning and variant testing. Fragile or inconsistent strategies are discarded.
Backtesting is mandatory. No strategy advances without meeting validation requirements.
3) Paper trading (live market simulation)
Strategies that pass historical validation proceed to paper trading, where they run in real market conditions without putting capital at risk.
Paper trading is simulated trading that allows strategies to be practiced and observed without real money.
This stage captures:
- Live price behavior and regime shifts
- Execution timing and signal behavior
- Slippage and practical viability
- Strategy stability under current market conditions
No capital is at risk.
Paper trading exists to confirm real-world behavior before execution is ever considered.
4) Monitoring & meta-learning (drift detection)
After validation, strategies are continuously monitored for degradation and mismatch with current conditions.
KEK evaluates:
- Performance drift
- Regime alignment
- Variant comparisons
- Objective degradation and reliability decline
When drift is detected, refinement cycles may be triggered (re-optimization, re-parameterization, or redesign).
Monitoring improves strategy robustness over time — it does not force execution.
5) Optional execution (non-custodial)
Only validated strategies may be executed — and only when the user explicitly authorizes deployment.
Execution:
- Is explicitly authorized by the user
- Occurs through a non-custodial execution layer
- Never grants KEK custody of user funds
In non-custodial systems, users retain control of assets because they control their private keys (i.e., no third party takes custody).
Execution infrastructure
KEK DEX is Omnichain and built on Orderly Network's decentralized exchange infrastructure layer, which combines an orderbook-based trading infrastructure with a liquidity layer offering perpetual futures orderbooks.
KEK does not place trades autonomously. KEK does not control assets.
Execution is optional. Validation is required.
Custody boundaries
KEK enforces strict custody and authorization boundaries across the lifecycle:
- KEK never takes custody of user funds
- KEK requires explicit user authorization
- Strategy intelligence and validation are separated from execution
- Strategy generation cannot directly route or place live orders
- Execution is downstream of validation at all times
Why this lifecycle matters
This lifecycle exists to:
- Reduce execution and operational risk
- Prevent untested strategies from reaching capital
- Encourage systematic trading discipline
- Support long-term strategy development
- Preserve non-custodial custody boundaries
KEK is designed for strategy careers, not one-off trades.
Key guarantees
- No execution without validation
- All strategies are paper tested before live deployment
- Clear separation between intelligence and execution
- KEK never has custody of user funds
- Continuous monitoring after validation to detect drift