Understand the mechanism. Then test the model.
Clear explanations, original diagrams and worked examples. Learn the fundamentals and explore the related calculators. No live-price claims or return promises.
Financial foundations.
Understand investing schedules, capital risk and what portfolio results actually mean.
DCA & Average Cost Basis
Five fixed-dollar purchases, a partial sale and a synthetic candlestick chart with changing cost basis.
Position Sizing & Risk
Stop distance, fees and why notional exposure is not the same as planned loss.
Expectancy, Win Rate & R
Why a high win rate does not prove an edge, and what break-even frequency means.
Drawdown & Recovery
Peak-to-trough losses and why a 50% decline needs +100% to recover.
Arithmetic vs Geometric Returns
Why a +20% gain and −20% loss leave less money—and why compounding matters.
Correlation & Diversification
Why two investments can fall together—and how shared movements change portfolio risk.
Risk & probability.
What model outputs mean, and where their underlying assumptions may fail.
Risk of Ruin Explained
Loss thresholds, losing sequences and first-passage probabilities.
Monte Carlo for Traders
How simulated paths and distributions can illuminate hypothetical outcomes.
Sensitivity & Losing Streaks
Stress assumptions and compare sizing rules without forecasting markets.
Volatility vs Risk
Two invented price paths share the same ending value, but travel through different drawdowns.
Why Backtests Fail
Overfitting, future-data leakage, missing costs and a fictional train-versus-test equity chart.
Probability & Model Limits
See why a 60% assumed win chance does not guarantee six winners in ten trades.
Market mechanics.
Costs, collateral, instrument ownership and derivative settlement.
Fees, Slippage & Funding
Maker/taker, spread and funding, plus an illustrated gross-to-net P&L example.
Spot vs Futures vs COIN-M
Compare ownership, linear and inverse contract P&L, margin and liquidation.
COIN-M Futures in Detail
Inverse fixed-USD-face contracts, coin-denominated settlement and hedge examples.
Liquidation & Margin
Understand initial margin, maintenance requirements, collateral and forced exits.
Figures and worked prices are invented educational illustrations unless explicitly labeled otherwise. Find the detailed model limits in Methodology →.