Research

The Overfit archive

Every issue of Overfit points here. Research notes and long-form breakdowns: backtesting, portfolio construction, market structure, and the mechanics behind systematic trading.

#109

Ray Dalio's Holy Grail of Investing, Tested: Four Asset Classes Beat Nine Funds

Dec 27, 2024 · 11 min read

Ray Dalio says fifteen uncorrelated return streams cut your risk by 80% without cutting your return. The formula is exact and it reproduces. What fails is the shopping list — nine asset-class funds buy 3.37 independent bets, while four genuinely different asset classes buy 3.72.

#148

ADX Indicator Tested: 8,370 Days Say It Measures Size, Not Direction

Dec 13, 2024 · 7 min read

Across 8,370 SPY days and 4,889 ES days, a rising ADX predicted a wider move in both directions rather than an upward one — and the +DI/-DI pair that is supposed to supply the direction pointed the wrong way on both instruments.

#108

Connors Double 7 Strategy: Your Beginner’s Guide to Algo Trading Success

Dec 6, 2024 · 4 min read

Discover the Connors 7-7 strategy to boost your trading skills with practical examples from StatOasis and Ali Casey

#107

Mastering the Awesome Oscillator: A Trader’s Guide to Profitable Strategies

Nov 29, 2024 · 3 min read

Learn how to use the Awesome Oscillator, developed by Bill Williams, to craft effective trading strategies. Explore its mechanics, benefits, and tips for building a profitable trading portfolio.

#106

Investing Doesn’t Have to Be Hard: The Bucket System Simplified 🪣

Nov 22, 2024 · 6 min read

Learn how to use long-term, medium-term, and short-term investing buckets to grow wealth and simplify your financial strategy. 🌟

#105

13 Best Candlestick Patterns for Trading the USDJPY Forex Pair 📊: Featuring Two Proven Strategies!

Nov 15, 2024 · 3 min read

Explore the top candlestick patterns for trading the USDJPY Forex pair. Learn how testing 13 candlestick patterns with different entry and exit strategies can reveal profitable edges.

#104

S&P 500 Drawdowns Since 1871: Every Decline, How Long They Lasted, and What Actually Recovered

Nov 4, 2024 · 17 min read

Every S&P 500 decline of 10% or more since 1871 — all 32 of them — measured three honest ways (price, dividends reinvested, and inflation-adjusted): how deep each went, how long it lasted, and how long it took to recover.

#103

Monte Carlo for Traders: I Checked Whether the Simulation Was Right. It Wasn't.

Oct 4, 2024 · 6 min read

Monte Carlo resampling is how traders answer 'how bad can this really get?' I ran it on 3,232 strategies and then did the part nobody does: checked the answer against what actually happened next. The simulated 1-in-20 worst case was breached 22.5% of the time.

#102

Unveiling Toby Crabel's Up & Down Thrust Trading Patterns

Jul 23, 2024 · 5 min read

Discover the intricacies of Toby Crabel's Up and Down Thrust trading patterns. Learn to identify and utilize these powerful strategies to enhance your trading success.

#101

Master Volatility Futures: VIX Trading Strategies 📉

Jul 16, 2024 · 4 min read

Discover top algo trading strategies for mastering volatility futures and boosting your VIX profits. Learn proven techniques to maximize gains and enhance your trading success in volatile markets.