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Posted on Jul 23, 2018 by Kris Longmore

This is the first in a two-part series. Be sure to read part 2 - Practical Statistics for Algo Traders: The Law of Large Numbers  How do you feel when you see the word "statistics"?  Maybe you feel that it's something you should be really good at but aren't. Maybe the word gives you a sense of dread, since you've started exploring its murky depths, but thrown your hands up in despair and given up - perhaps more than once. If you read lots of intelligent-sounding quant blogs displaying their use of "practical statistics", you might even feel like your lack of statistical sophistication is what's standing between you and algo trading success. If you are confused, you're not alone. The reality is that classical statistics is difficult, time-consuming and downright confusing. Fundamentally, we use statistics to answer a question - but when we use classical methods to answer it, half the time we forget what question we were seeking an answer to in the first place. even sparkles don't soften the knee-jerk angst But guess what? There's another way...