The Strategy That Lost Money for 2 Years (Then Made 19% Annually)

Fabio Capela
Systematic trading , Trading psychology , Portfolio management , Risk management , Personal journey , Algorithmic trading , Market regimes , Strategy development

Most trading success stories skip the embarrassing part. Here’s what actually happened.

The 7 Backtesting Sins That Kill Trading Strategies Before They Start

Fabio Capela
Algorithmic trading , Quantitative finance , Risk management , Systematic trading , Portfolio management , Backtesting , Trading systems , Investment strategy

Bottom Line Up Front: Even the most sophisticated trading algorithms fail in production because of fundamental backtesting errors. After analyzing thousands of strategy failures, we’ve identified seven critical mistakes that account for over 90% of the gap between backtest and live performance. Master these, and you’ll avoid the graveyard of “perfect” strategies that blew up on day one.

Dollar Cost Averaging is Mathematically Inferior (But You Should Still Do It)

Why the “worse” investment strategy often produces better real-world results

The 5-Minute Portfolio Hack That Beats 90% of Active Funds

Why complexity is the enemy of good returns

Stop overthinking your portfolio. While Wall Street sells you complex strategies with 15+ holdings, fancy factor tilts, and quarterly adjustments, there’s a stupidly simple approach that beats 90% of active funds: two ETFs and quarterly rebalancing.

Building a 3-Fund Portfolio: Step-by-Step Walkthrough

By the end of this guide, you’ll know exactly how to build and maintain a complete investment portfolio using just three low-cost index funds. No complicated stock picking, no timing the market, no endless research required.

The Hidden Reality of High Sharpe Ratios: Why Even Elite Strategies Face Monthly Losses

The Sharpe ratio stands as one of finance’s most celebrated metrics, elegantly capturing risk-adjusted returns in a single number. An annualized Sharpe ratio of 2.0 sounds impressive—it represents exceptional risk-adjusted performance that places a strategy in the top tier of investment approaches. Yet here lies a reality that surprises many investors: even strategies with outstanding annualized Sharpe ratios experience negative months far more frequently than intuition suggests.

Why I Never Use Stop Losses (And You Shouldn't Either)

“You should always use stop losses.”

I’ve heard this advice countless times from financial advisors, trading courses, and investment books. It’s supposed to be one of the fundamental rules of risk management—set a level where you’ll cut your losses and stick to it no matter what.

The Truth About Beating the S&P 500: What 8 Years of Real Trading Taught Me

I’ve heard this phrase countless times from financial advisors, academic researchers, and fellow investors. The conventional wisdom is clear: 90% of professional fund managers fail to outperform the S&P 500 over ten years, so why should individual investors even try?

How I Built an Investment Strategy That Beat the S&P 500 by 8% Annually for 8 Years

Eight years ago, I was frustrated. Like most investors, I was putting money into index funds and watching my portfolio swing wildly with every market tantrum. The conventional wisdom said I should just “buy and hold” the S&P 500, but watching 20% drawdowns every few years while barely beating inflation didn’t feel like a winning strategy.

Why Index Funds Are Sabotaging Your FIRE Timeline: The Systematic Solution

Most FIRE investors are unknowingly adding 5+ years to their retirement timeline by sticking with “safe” index funds. While the investment world preaches the gospel of passive investing, a growing number of sophisticated investors are achieving Financial Independence faster through systematic strategies.

Why Most DIY Investors Underperform (and How to Fix It)

The promise of DIY investing is appealing: take control of your financial future, avoid advisor fees, and potentially beat the market. Yet research consistently shows that self-directed investors typically underperform major market indices by a significant margin.

Trend Following Strategies: What 137 Years of Research Reveals (2024 Guide)

Trend following has long been a cornerstone strategy for traders and investors. By systematically riding market momentum, trend following strategies have historically delivered strong risk-adjusted returns across various asset classes. But how does the strategy hold up in different environments, and what does academic research say about its efficacy? Let’s explore the key insights from a wealth of scientific literature on trend following.

9 Proven Strategies to Reduce Portfolio Drawdowns in 2024 (Expert Guide)

In 2024, investors are more conscious than ever of the impact of market downturns on their portfolios. With global economic uncertainty and volatile market dynamics,reducing drawdowns - the peak-to-trough declines portfolio value - has become a key focus. By employing the right strategies, investors can protect their wealth and reduce the anxiety associated with significant losses. Below, we explore several actionable strategies to reduce portfolio drawdowns, helping you maintain steadier returns over the long term.

Portfolio Management