XI · Strategy
Station XI of The Quant Map: a decision rule repeated through time. Trend, reversion, carry, breakout, matched to noise. Reading order plus the free map PDF.
a decision rule repeated through time, and not everything that trades is alpha
A strategy is the decision frozen: monthly, rank by carry-to-vol, long the top three, short the bottom three, equal risk, rebalance. Morning mood is no longer an input. A clever way to buy is plumbing, a regime model is weather, and a risk limit is a seat belt. Useful, and none of them is a reason someone is paying you. High-noise markets want reversion. Low-noise markets want trend. One indicator on every chart is a refusal to read the observable.
A strategy is the decision frozen so a stranger could run it. Everything that trades is not alpha: execution tricks, regime filters, and risk limits are plumbing, weather, and seat belts.
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 |
|---|---|
| The Difference Between a Trading Rule, a Strategy, and a Portfolio | A rule emits a score. A strategy adds size, a vol target, and a kill. A portfolio is the set of strategies that can survive one of them dying. |
| Trading Systems Are Recipes, Not Predictions | Precise enough that a stranger gets your trades on your data. The recipe includes the kill, because the regime the recipe assumes will end. |
| Matching Strategy Families to Market Conditions | Family first: trend, reversion, carry, breakout. The market's noise level picks the family. |
| High Noise Markets Are Mean-Reversion Markets | Path length long relative to net move. Fading is the family that matches the observable. |
| Low Noise Markets Are Trend-Following Markets | Net move large relative to path. Breakout and trend are the family. A fader here is fighting the structure. |
| Why "Works on All Markets" Is Usually a Red Flag | A rule indifferent to noise, session, and wrapper has met a backtest universe. |
| Building a Trend Follower, Component by Component | Entry, filter, size, cost, kill, each as its own part. You can see which part failed. |
| Why Breakout Systems Need Low Noise Environments | The breakout is a bet on path efficiency. In chop it pays the spread to reverse. |
On the map: ← X · Decision policy · The grand map · XII · Factors →