Practitioner course in trader judgement
Evidence-Based Trading: Scientific Thinking for Traders
Evidence-based technical analysis treats every trading idea as a claim to be tested. Following the scientific approach set out by David Aronson and the wider research literature, this course teaches the scientific method, the cognitive errors that make weak ideas look strong, data-mining bias, and a hand-run test that can reject your favourite setup.
Evidence-based technical analysis starts from an uncomfortable fact: most of what traders believe about charts has never been tested, and much of what has been tested failed. The scientific method gives a trader a way to sort ideas that work from ideas that only feel right. This course teaches that method to traders who do not write code.
What is evidence-based technical analysis?
An approach in which a trading idea counts as knowledge only after it has been stated precisely and tested on data the idea was not built from. David Aronson set it out for technical analysis, drawing on the philosophy of science and on research into how people misjudge evidence. The course teaches the method step by step and applies it to real trading claims.
What is data-mining bias in trading?
When you try many rules on the same history and keep the one that did best, its past result is partly luck, and the luck does not repeat. The more rules you try, the bigger the overstatement. The course shows the effect with a spreadsheet simulation and teaches the simple guards against it.
Who is this course for?
Traders who want to know whether their methods are real, and anyone tired of trading advice that cannot be checked. No programming is needed.
What you will be able to do
- State a trading idea as a falsifiable claim with a measurable outcome.
- Identify confirmation bias, hindsight and the illusion of pattern in your own trading notes.
- Explain data-mining bias and why the best of many tested rules is usually overstated.
- Run a hand test of one idea with a benchmark, an out-of-sample period and a judgement about chance.
Syllabus, module by module
Claims and knowledge
Subjective and objective methods, and what makes a trading claim testable.
How minds mislead
Confirmation bias, hindsight, illusory correlation and the stories we tell about charts.
The scientific method
Hypothesis, prediction, test and the null hypothesis, applied to a trading rule.
Chance and sample size
How many trades it takes to tell an edge from luck, with simulations in a spreadsheet.
Data-mining bias
Why testing many rules and keeping the best one inflates results, and the honest corrections.
Testing an idea by hand
A written protocol, a benchmark, an untouched test period and a verdict you accept in advance.
How the certificate is earned
Weekly critical-thinking exercises and two graded problem sets: an audit of ten published trading claims, and a full written test of one of your own ideas. On a pass you receive the Course certificate in Evidence-Based Trading, issued by the Institute with a verification code. Read how certification works.
Before you start
Trading Edge: Expectancy, Probability and Luck and The Trading Journal: Self-Analysis for Traders.
This course counts toward
- Intermediate Certificate in TradingThe second semester of the trader path: a day trading course and swing trading course in one, covering technical analysis, price action, intraday execution, news, options, evidence-based testing and the written trading plan, with a tested-plan capstone. No programming.
- Diploma in Professional TradingThe top credential on the trader path and the Institute's trading certification for people who do not write code. Three semesters, 24 courses and a 160-hour capstone, from a first lesson on how markets work to a six-month simulated trading business reviewed like a desk.
Questions applicants ask
Is this course based on Aronson's book?
It follows the approach of David Aronson’s Evidence-Based Technical Analysis and the research it draws on, taught without code. Reading the book alongside the course is recommended but not required.
Will the course tell me which strategies work?
It will teach you how to find out, and show you what published tests have found. The graded work is a test of your own idea, because an edge you have verified yourself is the only kind you can trade with confidence.