Debunking market myths in Excel

Having the ability to call bullshit on market claims is a superpower. There’s some ancient trader lore that says it’s a bad idea to hold SPY when it’s under the 12-month moving average of its price. Is there anything to this idea? Check out the webinar below to see how we put this idea to …

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Easy games vs hard games in trading

In Trade Like a Quant Bootcamp, we talk about win-win risk premia harvesting. It’s a game where no one’s really competing for the edge. Think about VTI (Vanguard’s Total Stock Market ETF). You expect to make more than implied by the stock market’s cash flows (a risk premium) because holding these stocks is uncomfortable. They’re …

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Confessions of a recovering engineer (or why engineers make bad traders)

Here’s something that might shock you: Engineers make the worst traders. I’m speaking from experience here. As an engineer who transitioned to trading, it wasn’t until I stopped thinking like an engineer that I started to make progress. You can read all about this in my case study, by the way. Engineers like me are …

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The Hidden Gems of High Yield Bonds: Fallen Angels

High Yield Bonds analysis

What’s a Fallen Angel Bond? It’s a bond that’s been kicked out of investment-grade paradise. Once upon a time, it was rubbing shoulders with the blue-chip elite. But then something happened – maybe the company took on too much debt, or the industry hit a rough patch – and next minute, the bond gets downgraded …

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What’s the chance that a market effect is real? Monte Carlo permutation tests in Excel

Let’s say you observe some effect in the market and quantify it with simple data analysis. A good question is, “What are the chances I’d see this effect solely due to chance?” And using simple Excel tools, we can answer this question without doing any formal statistics. Before we get into it, it’s worth noting …

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Relax and trust the market gods

With the recent sell-off in pretty much everything, it’s a good time to talk about managing your expectations of trading. The essential thing is to understand and embrace the mayhem of the markets. And to understand what you can control and can’t control so that you don’t send yourself crazy worrying about things that there …

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