X · Decision policy

Station X of The Quant Map: trade only if expected return clears costs plus a threshold. Expectancy and sizing. Reading order plus the free map PDF.

forecast → position: trade only if E[r] clears costs + threshold

The decision is the arithmetic after the score: expected edge next month, about a 4.1% gap divided by 12, near 34 basis points, against a couple of basis points to get in and out at institutional size. Clear the toll with room, then size by risk so one wild pair cannot own the book. Refuse a rule whose expected gross edge per trade sits under about three times the all-in round trip. That filter deletes most of what gets marketed as a five-minute system.

One number decides the station: expected edge per trade against the all-in round trip. Under about three to one, the rule is a donation schedule.

The Quant Map PDF works this spine through example research: five full descents from observation to live rule, and a library of 835 strategy entries, each with a named payer and a named failure mode. Get the free PDF on the Start Here page.

Reading order

Top to bottom. Stop at the first article you cannot apply to a live trade; that is the one to read slowly.

Article	Why it is on this row
Expectancy: The Most Important Formula in Trading	Win rate times average win, minus loss rate times average loss. The tail term is the one the win rate hides.
Cost-Aware Ranking: The Missing Step in Cross-Sectional Strategies	A name that ranks first and costs 40 basis points to enter is a different trade from a name that ranks third and costs 2.
Why Transaction Costs Should Be Added Before You Fall in Love	Put the toll in the backtest on the first run. A curve you have already bonded with will argue for a kinder cost.
The Trader's Real Job: Control Losses, Not Predict Everything	Direction is the variable you do not set. Size, exposure, the drawdown stop, and the kill criterion are the ones you do.

On the map: ← IX · Forecast / signal · The grand map · XI · Strategy →