3 posts tagged with "convexity"

Grid trading looks like easy money.

Place buy orders below the current price. Place sell orders above. As price oscillates, orders fill. Profit accumulates.

It's mean reversion made mechanical.

Until it isn't.

Theory is clean. Markets are messy.

Let's walk through a real example that ties together everything from the first three posts.

Most strategies people run are linear.

Fixed position size. Fixed stops. Linear P&L intuition.

Linear thinking works until volatility changes regime.

Then losses stop scaling linearly.