Expectancy is the map. The path is survival — and only those who can survive it endure. Expanding on Expectancy vs. Survival In our recent post, Expectancy vs. Survival — Why the Outlier Hunter Thinks Differently, we challenged the industry’s...
Ask most traders how to measure an edge, and they’ll point you to expectancy: Expectancy = (Win% × Average Win) – (Loss% × Average Loss) It feels neat, logical, even scientific. If the number is positive, you supposedly have an...
In our last blog post, Fractals, Diversification, and the Myth of Dilution, we raised significant feedback on diversification when it relates to fractal systems. In this post we drill further into this principle. The Key Question Are financial markets fractal...
Most investors think diversification waters down returns. They are wrong. Dead wrong. This belief comes from the neat Gaussian world of classical finance. Add more bets, and risk falls with the square root of the number of bets. Smooth curves....
Every investor faces the same decision: do you smooth the ride or chase the extraordinary? On one side lies the comfort of mixed allocation. Blend trend following with mean reversion and you’ll get smoother equity curves, smaller drawdowns, and something...
The Ephemeral Nature of Systems Every system has a life cycle. A seed becomes a tree, a business rises and falls, a financial regime dominates for decades before giving way to something new. Biological, social, financial, and physical systems are...
“All who follow trends may share a compass – but not all walk the same path.” I. Introduction – Same Label, Different Games Trend following is often discussed as if it is a single, unified strategy, a black box that...
“When meaning fractures, only structure remains. And structure moves.” 1. The World is Fracturing We are no longer living in a shared reality. What began as cultural disagreement has hardened into epistemic rupture – a bifurcation of embedded realities. Across...
“A backtest can show you what worked. But markets don’t reward what worked. They reward what adapts.” Backtesting is a cornerstone of modern trading. It helps traders analyze performance, refine strategies, and justify risk models. But it also creates...
“True risk isn’t volatility. True risk is missing the outlier because it wasn’t in your universe.” Traditional investing preaches diversification as the ultimate risk reducer. It’s the core principle behind Modern Portfolio Theory (MPT): spread your capital across many assets,...
