📈 SigmaTrader Blog

🎲 Betting Strategy Simulations: What Happens to Your Money Over Time? When people hear about a “winning trading strategy” or a “high-probability setup,” they often imagine that turning a small account into a fortune is just a matter of repeating it over and over. But reality — and math — tell a very different story. In this article, I’ve simulated four classic strategies used in betting, trading, and risk-taking: 💸 All-in Strategy 💵 Fixed Bet Strategy 🔁 Martingale Strategy 📈 Kelly Criterion Strategy We’ll see how each behaves over hundreds of rounds with thousands of independent players — who goes bankrupt, who gets rich, and why. All simulation code is open-source here: GitHub – handysofts/betting-strategy-simulations 🧪 How We Ran the Experiments 👤 Number of players: 1000 🔁 Rounds per player: 300 💵 Initial balance: $100 🎲 Game: 50/50 coin flip If heads: +100% (double your bet) If tails: −60% (lose 60% of your bet) For each simu...

In today’s fast-changing tech landscape, outsourcing companies are facing heavy skepticism. Personally, I’ve never been a big fan of the outsourcing model, and with more corporations moving development back in-house, it’s clear that outsourcing firms are losing some of their traditional ground. However, this doesn’t mean outsourcing companies will vanish overnight or that artificial intelligence (AI) will simply “kill” the sector. The reality is that these firms still have deep client relationships, provide ongoing support, and deliver services that many enterprises continue to rely on. What’s interesting is how bearish sentiment around outsourcing companies has become. When the market leans too heavily in one direction, it can sometimes create opportunities worth revisiting. Take Accenture ( $ACN ) , for example: ✅ Founded in 1951, with decades of industry experience ✅ Strong dividend payer ✅ Currently sitting at a key weekly support level ✅ $146B market cap, meaning it...

Missed the Precious Metals Rally? Maybe It’s Time to Look at Healthcare If you didn’t catch the recent rally in precious metals and commodities like gold, silver, and platinum, don’t worry—you might still have a train to board. Historically, when markets start topping out, investors often rotate into defensive sectors such as Healthcare . Even if that rotation doesn’t play out this time, there are still plenty of opportunities in healthcare. Many companies in the sector offer dividend yields north of 3% , while trading at attractive valuations. On top of that, healthcare businesses typically operate with high margins , making them resilient in different market cycles. Think of investing like this: instead of chasing butterflies, build a garden . If the butterflies come, great. If not, you’ll still have a thriving, beautiful garden. Healthcare fits this mindset well—strong fundamentals, reliable cash flows, and dividends that reward patience while prices hover around support levels. ...

When Others Are Fearful, Attack; When Others Are Euphoric, Defend Howard Marks, one of the most respected investors of our time, reminds us that the market is never purely black or white—it’s always grey. In his latest memo, he challenges the binary thinking of “Buy or Sell? Hold or Dump?” Instead, he emphasizes balancing your portfolio between offense and defense, depending on market sentiment. “When others are fearful → attack. When others are euphoric → defend.” This simple yet powerful principle lies at the core of contrarian investing. But how do you translate it into actionable steps? Marks introduces a framework that mirrors the military’s DEFCON system , which measures defense readiness from 5 (normal readiness) to 1 (nuclear attack imminent). In the investing world, he proposes INVESTCONs to guide us during periods of high valuations and widespread optimism: INVESTCON 6: Stop Buying INVESTCON 5: Reduce aggressive holdings and increase defensive holdings INVESTCON 4:...

The Great Divide: Storm Warnings vs. Endless Optimism In today’s markets, economists, investors, and money managers seem to be split into two very different camps. The First Camp: Warnings From the Old Guard Some of the most respected voices in finance – people like Warren Buffett , Jamie Dimon (CEO of JPMorgan, the world’s largest bank), and Ray Dalio (founder of Bridgewater, the biggest hedge fund) – keep warning that a storm is brewing. They point to: Rising U.S. debt and soaring yields on 30-year bonds in both the U.S. and Japan. Geopolitical instability across the world. A strong rally in gold paired with a weakening U.S. dollar . The fact that we might be at the peak of a very big economic cycle – and when such cycles turn, the pain can last for years. Their message is clear: be careful . The Second Camp: The New Optimists On the other side are younger traders, investors, and economists who believe that nothing truly bad can happen . And even if it does, ...

One of Charlie Munger’s favorite tricks for solving problems wasn’t something flashy or complicated. It was simple, almost childlike. He called it: “Invert, always invert.” But the story behind it goes back much further than Omaha boardrooms or Berkshire Hathaway meetings. From a Mathematician to an Investor In the 19th century, German mathematician Carl Gustav Jacob Jacobi often faced impossible problems. Instead of trying to wrestle them head-on, he flipped them around. If proving something directly was too hard, he asked himself: “What would make the opposite true?” Munger stumbled across this idea and immediately saw how powerful it was. If it worked in mathematics, why not in business, investing, or even life? He often quipped: “All I want to know is where I’m going to die, so I’ll never go there.” It sounds funny, but behind the humor is the essence of inversion: if you want to succeed, start by avoiding failure. A Dinner Conversation Imagine you’re at dinner with Charlie Mung...

While the stock market often focuses on high-flying tech or mega-cap growth stocks, two healthcare powerhouses are quietly innovating with AI while offering stability in uncertain times : UnitedHealth Group ( UNH ) and Elevance Health ( ELV ) . Both stocks have been beaten down recently, but their AI-driven operations and diversified healthcare services make them resilient in a potential recession — and they might be worth a closer look. UnitedHealth Group (UNH) — The AI-Enabled Insurance Leader UnitedHealth Group is more than just a health insurer. Its Optum division is a massive engine of growth, leveraging AI, data analytics, and digital health technology across: Optum Health : Clinics, urgent care, telehealth, and value-based care programs. Optum Insight : AI-powered claims processing, predictive analytics, and decision support. Optum Rx : Pharmacy benefit management, prescription program optimization, and mail-order pharmacy. Key highlights: Over 1,000 AI solutions...

 When markets turn bearish, one asset often surprises people by strengthening: the U.S. Dollar Index (DXY). At first glance, this looks counterintuitive. After all, when the Fed cuts rates during downturns, the dollar should weaken. So why does DXY frequently rise instead? 1. The Dollar as the World’s Safe Haven Global reserve currency → Most global trade, debt, and commodities are priced in USD. Liquidity demand → In times of stress, investors and institutions scramble for cash. The deepest, most liquid market is the U.S. dollar. Treasuries as collateral → U.S. bonds are considered the safest asset, and buying them requires dollars. 2. Crisis Dynamics Overrule Rate Cuts In “normal” conditions, interest rate differentials drive currencies. Fed cuts rates → interest rate differential falls → USD should weaken. But that logic is more dominant in “normal times” when carry trades and yield differentials drive FX. However, in a crisis, demand for safety and liquidity d...