Valuation Timing with Excel

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 …

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The best places to get trading ideas

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 …

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Stop Trying to Beat Djokovic at Tennis

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 …

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Don’t major in minor stuff

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 …

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Steal ideas, not implementations

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 …

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What P&L Swings Can I Expect as a Trader?

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 …

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