Trading strategy

In the high-stakes arena of prediction markets, a counterintuitive pattern emerges: retail traders who correctly pick winners more than half the time still lose money, while automated traders with coin-flip accuracy pocket nine-figure profits. Using 222 million prediction market tradeswith directly observable terminal payoffs, the paper “Who Profits from Prediction? Execution, Not Information” presents a clean answer to why it is so. The authors decompose trader returns into a directional component and an execution component, revealing that the execution component, not the directional component, determines which trader types earn positive returns. 

One of the advantages of the Quantpedia Pro platform and its Portfolio Analysis toolkit is the ability to analyze not only multi-asset and multi-strategy portfolios but also individual equity curves. Users can upload virtually any return series or analyze assets already present in the database. The same analytical tools used for portfolio construction can therefore also be applied to single assets.

Given the current macro-driven environment, commodity markets—particularly crude oil—offer a relevant case study. The United States Oil Fund (USO) ETF serves as a practical proxy for oil price dynamics. By analyzing its equity curve through Quantpedia Pro, we can explore whether persistent patterns, behavioral effects, or structural inefficiencies exist and whether they can be transformed into systematic trading strategies.

For many investors, short-term interest rates are often treated as something the market “discovers.” In reality, the Federal Reserve has enormous control over how the front end of the yield curve evolves. While textbooks often portray the Fed’s policy rate as a flexible tool that reacts quickly to economic data, the actual behavior of the Federal Open Market Committee (FOMC) looks very different. In practice, monetary policy tends to move in long, persistent cycles. The Fed spends years hiking rates, or years cutting them, and only rarely reverses direction quickly. For anyone trading rates, bonds, or rate-sensitive assets, this persistence matters. It means that the path of short-term interest rates over the next one to two years is often largely shaped by the Fed’s policy trajectory rather than by constantly shifting market expectations.

This observation has an important implication: the short end of the Treasury curve often behaves less like a forecasting market and more like a gradual reflection of the Fed’s policy cycle. When the Fed enters a tightening or easing phase, that trend tends to propagate through Treasury yields from one month out to roughly two years. In this article, we show that these policy-driven trends can be measured and used. By identifying whether the Fed is in a tightening, easing, or neutral phase, investors can improve their expectations about the near-term evolution of the yield curve. For fixed-income portfolio managers and macro traders, recognizing these policy regimes can help sharpen rate forecasts, improve duration positioning, and better manage risks tied to interest-rate movements.

In recent times, we have observed heightened volatility across financial markets. Concerns surrounding government shutdowns, as well as the uncertainty they create, do little to calm these fluctuations. Rather than being purely disruptive, however, such events raise an intriguing question: could these episodes of political and economic uncertainty actually be leveraged to our advantage in investment strategies? In this article, we will examine several asset classes and attempt to assess whether this phenomenon provides a sufficiently relevant signal for investment decisions.

We’ve previously examined how central bank policy decisions—particularly those by the Federal Reserve and the European Central Bank (ECB)—impact stock market behavior. The price drift in U.S. equities around the Federal Open Market Committee (FOMC) meetings is a well-documented phenomenon. Likewise, our research study of the ECB revealed a pre-announcement drift, underscoring the anticipatory nature of equity markets ahead of key policy events and the potential opportunities for trading strategies. But are such price drifts unique to the Fed and ECB? In this article, we broaden the scope to investigate whether similar market behavior occurs around monetary policy announcements by other major central banks: mainly the Swiss National Bank (SNB), the Bank of England (BoE), and the Bank of Japan (BoJ).