Systematic strategy design (educational)
Every algorithm encodes a hypothesis about how markets behave. These pages explain the major strategy families — what edge each assumes, when it works, how it fails, and the engineering it demands — so you can reason about design trade-offs. They teach concepts and mechanics, never specific trades or signals.
Strategy Design: Systematic strategies fall into a few conceptual families: trend-following and momentum (bet that moves persist), mean reversion (bet that extremes revert), breakout (bet that ranges resolve into moves), volatility strategies (trade the size of moves), and relative-value approaches like pairs trading and statistical arbitrage (trade the relationship between instruments). Each assumes a specific market inefficiency, carries characteristic risks, and requires disciplined backtesting and risk control.
Trend-Following Systems
Strategy familyTrend-following is a strategy family that assumes established price moves tend to persist, so the system aims to enter in the direction of an existin…
Mean Reversion Systems
Strategy familyMean reversion is a strategy family that assumes prices which have moved far from a reference level tend to move back toward it, so the system fades …
Breakout Systems
Strategy familyA breakout system assumes that when price decisively escapes a well-defined range or level, a new directional move is beginning, so it enters in the …
Momentum Systems
Strategy familyMomentum is a strategy family that assumes assets which have outperformed recently tend to keep outperforming over a medium horizon, so the system ho…
Volatility Systems
Strategy familyVolatility systems trade the size of market moves rather than their direction, positioning for volatility to expand or contract based on the assumpti…
Statistical Arbitrage (Conceptual)
Strategy familyStatistical arbitrage is a market-neutral strategy family that combines a large number of small, statistically identified relative-value bets, relyin…
Market Making (Conceptual)
Strategy familyMarket making is a strategy family that continuously quotes both a bid and an ask, aiming to earn the spread by buying at the bid and selling at the …
Pairs Trading (Conceptual)
Strategy familyPairs trading is a relative-value strategy that trades the spread between two historically related instruments, going long one and short the other wh…
Portfolio Strategies
Strategy familyPortfolio strategies combine multiple individual strategies into a single book and decide how to allocate capital among them, aiming to diversify acr…