04 / RESEARCH

Strategy Research

Strategy research encompasses the full lifecycle of developing, testing, and validating systematic trading hypotheses. This includes hypothesis generation, backtesting, performance evaluation, and robustness analysis.

Why It Matters

The systematic evaluation of trading hypotheses requires rigorous methodology to avoid common pitfalls such as overfitting, data mining bias, and unrealistic assumptions about execution. Proper strategy research separates genuine signals from noise.

Research Questions

  • How can we systematically generate and evaluate trading hypotheses?
  • What validation procedures best identify overfit strategies?
  • How should transaction costs and slippage be modeled?
  • What is the minimum data requirement for reliable strategy evaluation?

Methods

Hypothesis-driven strategy development
Walk-forward optimization
Monte Carlo permutation testing
Transaction cost analysis
Regime-aware backtesting
Multi-market validation

Experiments

Research in progress. Current focus on developing frameworks for automated hypothesis generation and evaluation, with emphasis on preventing overfitting and ensuring out-of-sample validity.

Validation

Strategies are evaluated through multiple independent validation procedures including walk-forward testing, out-of-sample holdout, and Monte Carlo simulation of returns.