Every model of a financial market is a counterfactual. It describes not the market as it is, but the market as it would be if the simplifying assumptions held. Sometimes those assumptions hold well enough to be useful. The...
The title of this article is not a paradox. It is a precise observation about how most participants approach financial markets, and why they struggle. Complexity, in the technical sense, is a property of systems whose behaviour emerges from...
Most investors treat uncertainty as a problem to be managed, minimised, or engineered away. The instinct is understandable. Uncertainty is uncomfortable, and the entire apparatus of modern portfolio theory exists to give it a number and then reduce it. But...
Complex adaptive systems do not evolve gradually. They lurch. Long periods of relative stability are punctuated by abrupt transitions, dramatic shifts in regime that reorganise the system’s structure, relationships, and dynamics into something fundamentally different from what came before....
The dominant tradition in Western science is reductionist. Break a system into its components, study the parts, and reassemble your understanding from the bottom up. It is a powerful method. It built modern physics, chemistry, and medicine. But it...
Every trading model makes implicit claims about the structure of price data. It claims that certain patterns are signals worth responding to, that others are noise worth ignoring, and that the rules built to exploit the former will continue...
Diversified systematic trend following has a well-documented tendency to perform strongly during periods of market stress. The term “Crisis Alpha,” developed by Alex Greyserman and Kathryn Kaminski in their landmark work Trend Following with Managed Futures: The Search for Crisis...
Price does not move because information arrives. It moves because traders act. That distinction is not semantic. It is the fault line between two fundamentally different models of how markets work, and which side you stand on determines almost everything...
