Recently, many people have been eager to try automated trading and quantitative robots, but I want to say—before risking real money, understanding the risks should take priority over chasing profits. Today, let's talk about some common pitfalls in quantitative trading.

**Risk One: Strategies That Don't Adapt**

A strategy that sounds impressive doesn't necessarily suit you. A trend-based strategy that made a fortune during the previous bull market can quickly turn into a meat grinder in choppy markets. Especially when some people over-optimize using historical data (industry term: Overfitting), resulting in an annualized return of 100% in backtests but straight losses in live trading. My approach is to use tools to stress-test strategies across multiple timeframes and multiple assets, to understand the true profit and loss boundaries of the logic.

**Risk Two: Technical Failures**

This is often underestimated. Network hiccups can cause API connection drops, making it impossible to execute orders or causing duplicate orders. Even more painful are logical bugs hidden in the code, which can execute repeatedly before being discovered—by then, losses are already incurred. There's also the risk of API key leaks, which can lead to assets evaporating in minutes.

**Risk Three: Regulatory Violations**

Using quantitative tools on major exchanges requires compliance. Manipulative tactics like wash trading or volume inflation are absolutely zero-tolerance policies on platforms. Simply put, every trade you make with these tools is your responsibility in the end.

**My Risk Control Routine**

I treat quantitative robots like new employees who need strict supervision:

Start with small live trades, testing any new strategy with around 1,000 USDT for 1 to 2 months. Stop-loss is not optional; it must be set both at the tool level and the account level. Don’t just set it and forget it—regularly review and check if the performance has deviated.

Final words: Quantitative trading is a serious investment approach, not some get-rich-quick secret. To succeed, you need to invest time in learning, starting with understanding these risks. Remember—cryptocurrency investment itself is inherently risky, and quantitative trading cannot eliminate this fundamental risk.