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The Sortino ratio only counts downside volatility as risk. Here is the formula, a worked example you can check by hand, what a good number looks like, and four ways it can mislead you on a backtest report.
Discretionary vs systematic trading: what each one really means, what the data says about traders who make their own calls, the honest downsides of trading with rules, and a 3-question test to find out which one you are.
CAGR is the headline figure on every backtest report, and the number traders most often fool themselves with. What it is, how to calculate it, a realistic target range, and the numbers you must read beside it.
Quantitative trading is buying and selling using objective, tested rules instead of opinion. Here is how the institutional version differs from what a private trader runs on end-of-day data, and how to build your first quantitative trading system.
How to backtest a trading strategy step by step: define objective rules, choose data and software, read the key metrics, and stress-test before risking money.
Risk of ruin is the probability your account falls to a level you cannot recover from before your edge pays you. Here is what 100,000 simulated accounts show about position sizing, and why the 2% rule is weaker guidance than it looks.
The Sharpe ratio is the finance industry’s favourite risk metric, and it quietly misleads traders. Here is what it measures, what a good value is, and the four things it hides, plus the drawdown-based metrics that tell you more.
Most traders think they have an edge. Almost none can prove it. A real trading edge is a backtested, positive-expectancy advantage that lives in your rules – here is what it is, where it comes from, and how to quantify it.
One trading system is fragile. Learn to build a diversified portfolio of uncorrelated trading systems, allocate capital across them, and smooth your equity curve.
Buying the dip is the oldest advice in the market. So I built it into a rules-based system and tested it on every S&P 500 stock since 1990, including the ones that later went bust. Here is what the data actually said.
A 20-year systematic trader’s complete guide to automated trading systems. Learn the 3-layer framework most articles skip – the real costs – the daily routine – and the honest truth about AI trading bots.
Slippage in trading is the gap between your expected fill price and what you actually receive – and it silently erodes backtest results in live trading. Learn what causes slippage, how to model it correctly by liquidity tier, and how to protect your edge.