Introduction Position sizing often operates in the background of trading strategies, overshadowed by the allure of entry signals or timing models. Yet, it is this quiet but powerful mechanism that determines how risk is allocated, trends are exploited, and long-term...
Unlocking the Secrets of Cause and Effect: A Deep Dive into The Book of Why Judea Pearl, a trailblazer in the fields of artificial intelligence and causal inference, along with accomplished science writer Dana Mackenzie, has crafted a book that...
Introduction Quantica Capital has long been a beacon of rigorous quantitative research in systematic trading. Their latest paper, “Let it Ride or Lock it In? The Impact of Dynamic Versus Static Position Sizing on Trend-Following Performance,” offers a detailed and...
In trading, the most meaningful opportunities often lie at the extremes–those moments when price action escapes the gravitational pull of equilibrium and ventures into the unknown. These are the outliers, where the greatest potential exists, and this philosophy has always...
Introduction Periods of calm in financial markets often conceal hidden risks, quietly accumulating until they erupt in disruptive events. This blog explores why traditional risk models, like Value at Risk (VaR) and Sharpe ratios, fail to capture these vulnerabilities. By...
Introduction In financial markets, daily returns cluster around a central mean, with only a small fraction residing in the extreme tails. These tails—home to rare, large-magnitude moves—are the domain of outliers. While most strategies operate in the bulk of the...
Ensemble forecasting has revolutionized how we handle chaotic, nonlinear systems like extreme weather events. By replacing deterministic single-path models with probabilistic frameworks, ensemble models embrace uncertainty, providing actionable insights that improve preparedness and decision-making. This post explores the evolution of...
This miniseries expands on the concepts introduced in our prior 5 part miniseries “The Power of Process” by delving deeper into the mechanics of Complex Adaptive Systems (CAS). It uncovers the intricate processes behind system evolution, exploring core principles like...
Welcome to November 2024’s “What’s Caught Our Eyes This Month!” This month’s blog is packed with compelling insights from podcasts, articles, and book reviews that explore cutting-edge strategies and timeless principles in finance and trading. Highlights include an in-depth discussion...
This miniseries expands on the concepts introduced in our prior 5 part miniseries “The Power of Process” by delving deeper into the mechanics of Complex Adaptive Systems (CAS). It uncovers the intricate processes behind system evolution, exploring core principles like...
