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 …

Read more

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 …

Read more

From the Pits to the Page: A Conversation with Kris Abdelmessih

It was my absolute pleasure to chat with Kris Abdelmessih about markets and life. Kris was an options market maker who started out in the trading pits of New York and later flipped the script to set up the commodity options business for hedge fund Parallax Advisory. Today, Kris writes the Moontower newsletter on Substack …

Read more

Modelling UVXY trading strategies with Excel

UVXY is an ETF that targets 1.5x the daily returns of a 30-day constant-maturity position in VX futures – the SPVIXSTR index. Before 2018, it targeted 2x returns – but Volmageddon ruined the fun. UVXY has to trade every day: Anyone can trade UVXY in the market, and it trades close to the index because …

Read more

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 …

Read more

Trading books: Let’s get real about what you actually need

People often ask me for book recommendations. But here’s a better question: What’s going to help you make money today? Reading a book probably isn’t the answer. I’m not saying books aren’t useful. They absolutely are. But you’re not preparing for a PhD defence – you’re trying to turn money into more money through trading. …

Read more

Market making for beginners

I’ve noticed that beginners are often attracted to market making. To the uninitiated, it sounds like easy money and constant action. The reality, of course, is that market making isn’t the goldmine many think it is, especially not for beginners. In this article, I’ll explore why. Back in the early days of crypto, you could’ve …

Read more

How important is keeping up with macro news?

Someone recently asked me if obsessing over FOMC announcements, Non-Farm Payrolls reports, geopolitics and other macro news is important for traders. My answer might surprise you: unless you’re actually a dedicated macro trader – which is highly unlikely if you’re reading my stuff – it almost certainly won’t help your trading. Let’s start with what …

Read more

What can you do with a small trading account?

A lot of my advice boils down to trading is hard, so go after the easiest stuff you can find first. Some call this defeatist. I call it realistic and practical. A big part of trading is not screwing up. So, at the start, learning skills, defining processes, and building confidence are important. A question …

Read more