Aligrithm is an independent research publication on systematic trading, quantitative research, market microstructure, and adaptive systems. Long-form essays, code notebooks, and architecture breakdowns across eight pillars, built for traders who care more about how markets behave than about hype.
More about the publication →Read in order. Each pillar walks you out of one trap with one new ability. The newest article is the worst place to begin.
Edge is not knowing what others don't, it's doing what others won't. You get paid for constraints: operational pain, capacity-vs-skill, risk premia, thin margins. Name your check or assume you have none.
A trend follower is 0.2 Sharpe on one market; the build is the strategy. Walk all seven stages: universe breadth, vol-normalized crossover, capped sizing, sector balance, inverse-vol risk, and buffered execution.
The best arbitrage trade is the closest fair price to the unfair one. One projection returns the trade, the profit, and the target prices at once, measured with KL divergence, not a straight ruler.
Every arbitrage question reduces to one: is the price inside the marginal polytope or outside it. Inside means no trade; outside, the wall separating you from the shape is your portfolio.
Prices that don't sum to a dollar are a guaranteed trade, not a rounding error. De Finetti proved it in 1937, and Polymarket's speed-first design guarantees the mispricings keep coming.
Two prediction markets can each sum to a fair dollar and still be jointly riggable. The reason is geometry: logic deletes impossible outcomes, and the prices can land outside what's left.
The cleanest edge is not always yours. Match the source to your resources: small accounts trade informational and regime, large accounts with infrastructure run structural and execution, and specialists play to their skill.
Nine sources of edge in prediction markets, ranked cleanest to dirtiest: structural, execution, microstructure, temporal, informational, regime, portfolio, adversarial, operational. Forecasting is fifth and the most dangerous to size.
Prediction-market losses cluster into six anti-patterns: belief without calibration, arbitrage without execution, Kelly without error bounds, correlation blindness, backtest-equals-live, and no named edge. Each is a skipped step you can catch before you lose.
Winning a prediction-market bet does not make it a good trade. Grade the decision before resolution against five invariants: named edge, bounded downside, real-liquidity execution, error-aware sizing, and robustness to competition.
A limit order that fills in seconds is bad news: fast fills are adversely selected. Take liquidity only for arbs and large edges, provide it for small ones, and set your spread equal to your uncertainty about the true probability.
A guaranteed arbitrage is fiction until both legs fill. Sequential fills move the book against you, you pay the VWAP not the quote, and below five cents slippage and gas eat the edge. Copying an arb just makes you exit liquidity.