Blog Posts

Behavioral finance is a field of study that merges psychology and finance to explain why people often make irrational financial decisions that deviate from traditional financial models. For traders, behavioral finance helps understand the cognitive biases and emotional responses that can lead to suboptimal trading outcomes. Overall, it looks to better understand the mental side […]

Overconfidence can be a trader’s worst enemy.  We look the dangers of overconfidence in trading, the importance of intellectual humility, probabilistic thinking, and strategies to maintain a balanced perspective.   Key Takeaways – Overconfidence in Trading Absolute certainty is dangerous Avoid using terms like “will” or “always” when predicting market movements. There’s almost never such […]

Trading provides value to the financial system and economy in several key ways. Some who don’t understand or like finance, markets, or trading might claim it’s a “waste of time” or that other industries should be getting more of the talent that the financial industry gets. What exactly is the function and value of trading? […]

Fibonacci betting refers to a position sizing strategy based on the famous Fibonacci sequence, particularly with instruments involving binary outcomes (e.g., binary options).  This approach is based on the Fibonacci sequence, a series of numbers where each number is the sum of the two preceding ones.    Key Takeaways – Fibonacci Betting Structured Position Sizing […]

The D’Alembert System is a betting strategy with applications in trading.  Named after the French mathematician Jean-Baptiste le Rond d’Alembert, this system is based on the principle of equilibrium in nature.  While originally designed for traditional betting games like roulette or sports betting, it’s found applications in various forms of financial markets trading.   Key […]

Oscar’s Grind, also known as Hoyle’s Press, is a positive progression betting system sometimes applied to financial trading. This system triess to recover losses and generate a small profit through a series of bets or trades.   Key Takeaways – Oscar’s Grind Betting System in Trading Controlled Position Sizing Oscar’s Grind focuses on increasing trade […]

Value betting is a fundamental concept in financial trading. It’s a betting strategy that involves identifying opportunities where the potential reward outweighs the risk, based on a discrepancy between the perceived probability or expected value of an outcome and its actual likelihood. In trading, value betting principles can be applied to various markets, including stocks, […]

Proportional betting, also known as percentage betting, is a risk management strategy used in trading. This approach involves sizing your bets or trades based on a fixed percentage of your current capital, rather than using a fixed monetary amount. In trading, proportional betting can help manage risk, optimize returns, and provide longevity in the markets. […]

Testing a trading system involves evaluating its performance over a certain period of time and under various market environments.  The length of the testing period can significantly impact the results and confidence in the system.  Several key variables go into determining how long to test a trading strategy or system. It really boils down to: […]

Fixed ratio betting is a money management strategy used in trading to determine position sizing.  This method tries to grow an account systematically while managing risk.  Unlike most other position sizing techniques, fixed ratio betting adjusts position sizes based on account growth, allowing traders to potentially increase their profits as their account balance grows.   […]