Every time a card taps a terminal, somewhere in the world, hundreds of times every second, a tiny fraction of a cent flows to a company most people never think about. Not the bank that issued the card. Not the…
The first year of trading is not where you get rich. It is where you either build the habits that let you survive, or learn the expensive way why most people quit. The traps are predictable. That makes them avoidable.…
You had a very good month. The system clicked, the reads were clean, and something changed in how you see the market. Next month will be worse. Not because you will do anything wrong. Because the month you just had…
GREATEST TRADERS · EPISODE 33 André Kostolany The Wandering Speculator Who Became Europe’s Market Sage ▶ Watch on YouTube🎵 Listen on Spotify Also available on Apple Podcasts · Amazon Music In the autumn of 1996, a ninety-year-old Hungarian-born Frenchman in…
Risk is a roulette wheel. You do not know where the ball lands, but you know the wheel: thirty-seven pockets, one zero, and a house edge you can compute to four decimal places. The outcome is unknown. The distribution is…
EP12 · The Trader’s Physical Edge The Social Environment You are the average of the traders around you. Audit the average. Pillar 5 of 5 · ENVIRONMENT A trader takes a six-figure loss on a Tuesday afternoon. The trade was…
Sharpe needs a standard deviation and a risk-free rate. Sortino needs a target return and a denominator most software computes incorrectly. Calmar needs a high-water mark and three years of history. The gain-to-pain ratio needs addition. Jack Schwager popularised it…
Every backtest report you have ever opened leads with profit factor. Every EA vendor quotes it. Every strategy marketplace sorts on it. It is the single most visible number in retail trading software. It is also the easiest number in…
Sharpe and Sortino both measure the same abstract thing: the wobble in your return series. Neither measures the number that actually ends trading careers. Nobody quits because their standard deviation was elevated. They quit because they were down 42% from…
The Sharpe ratio has one flaw that everybody notices within about ten seconds of understanding it: it treats your best month as a problem. Standard deviation counts distance from the average in both directions. A +11% month and a −11%…
There is one number that decides where hundreds of billions of dollars get allocated every year, and almost every retail trader who quotes it is quoting noise. The Sharpe ratio is the closest thing finance has to a universal scorecard.…
First-level thinking: this is a good company, so buy it. This is a strong trend, so go long. This is bad news, so sell. Howard Marks’s objection is not that these statements are wrong. It is that they are almost…
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