Data analysisThink like a trader
Data analysis plays a central role in making sense of financial markets. But how can you verify the conclusions others draw, or better yet, uncover your own insights? Microsoft Excel remains one of the most powerful and accessible tools for financial data analysis, allowing anyone—from beginners to seasoned analysts—to explore data, test hypotheses, and make
Think like a trader
In much of life, success results from doing what other people expect you to be doing. You get top marks in an exam by answering the way the marker expects you to. Rising up the corporate ladder has as much to do with “being seen to do the right thing” as it has to do
FactorsOptionsTrading strategies
A few years ago, I got deep into the idea of constructing a long/short equity options portfolio based on the kind of simple factor sorts that had been so successful in quant equity. My original intention was to set up an index and license it to fund managers. Of course, there are many reasons why
Think like a trader
Steal them from other people If you know other people are making money trading an idea, it is often a good idea to pursue it too. This isn’t school. The market gods give no prizes for originality or showing your work. An edge is an edge however you got to it. But be smart about
Think like a trader
The first fundamental problem traders run up against is that there’s no beginners’ market. You have to compete for good prices with the best in the market. This is a problem. There are a lot of people better at markets than you. If you approach trading in a gung-ho manner, it’s basically like playing in
Think like a trader
If you try to teach yourself quant trading from the internet or from scientific papers, you run the risk of spending a lot of time majoring on minor stuff. You see it on Twitter all the time. Well-meaning beginner kwants are spending time worrying about niche modelling or inference techniques rather than trying to understand
Quant tradingRThink like a traderTools of the trade
Towards the end of last year, we ran a couple of free Zoom webinars on: Here are the recordings: Basics of Edge Extraction Data analysis for Traders The colab research notebook for the second session can be found here. (To make sense of it you’ll want to watch the video.)
Quant trading
Imagine you’re a relatively small, independent trader trying to turn trading from a hobby into a serious business. If that’s you, then there are a few concepts that will help you pick the right trades to get after. This is important because picking the right trades is most of the game. First, the Market Gods
Quant tradingTools of the tradeTrading strategies
If you have some factor that you think predicts future stock returns (or similar) and you are making charts like below, then here are some tips… We’ll go through an example of trying to “time” SPX with the level of VIX. You get daily SPX index prices and daily VIX close data You align them
Quant tradingTrading as a business
Many beginner traders don’t realize how variable the p&l of a high-performing trading strategy really is. Here’s an example… I simulated ten different 5 year GBM processes with expected annual returns of 20% and annualized volatility of 10%. (If you speak Sharpe Ratios, I’m simulating a strategy within known Sharpe 2 characteristics.) I plotted the
Quant tradingTools of the tradeTrading strategies
I’ve been helping a family friend with his trading. I’ve given him a simple systematic strategy to trade by hand. First, we set expectations We can plot the distribution of historic trade returns from past trading or a backtest as a histogram. This is useful because it gives us a hint as to what
RTrading strategies
I have been sharing examples of simple real-time trading research on my Twitter account. I do this kind of thing a lot in the training program of our trading group – and I’m sharing in the hope that it might also help a wider audience. Here’s a piece of analysis I did recently on a really
Think like a trader
Think like a trader
Think like a trader
CryptoData analysisThink like a trader
Think like a trader