IS4226 L4 recall cards
70 cards drawn from the L4 note and its embedded diagrams. Definitions, distinctions, process recall and formula recall only; no application scenarios or numerical drills. Notebook dates, ticker lists, complete code blocks and chart price examples are not memorisation targets. The terse market-making wording is explicitly attributed to the note.
Deck: IS4226::Week 4 · Tag: is4226::w4
The importer reuses the helpers in /Users/kienanana/Documents/obsidian-scripts/is4226_import_anki.py, with separate Week 4 identity tags. It adds/updates these cards without deleting notes. It does not run the Quiz 1 synchronisation routine.
python3 School/IS4226/ANKI/import_week4.py --validate-only
python3 School/IS4226/ANKI/import_week4.py
python3 School/IS4226/ANKI/import_week4.py --apply1. How do time-based and price-based charts differ?
Time-based charts represent fixed time intervals. Price-based charts add entries only after sufficient price movement; equal spacing does not imply equal elapsed time.
Source: L4 Trading Strategies and Systems — Reading Charts
2. Which time-based and price-based chart types are listed in L4?
Time-based: line charts and candlesticks. Price-based: Point and Figure, Renko and Kagi.
Source: L4 Trading Strategies and Systems — Reading Charts
3. What prices does a line chart show, and what detail does it hide?
Closing prices. It shows the overall trend but hides price swings within each interval.
Source: L4 Trading Strategies and Systems — Line and Candlesticks
4. What does OHLC stand for?
Open, High, Low and Close.
Source: L4 Trading Strategies and Systems — Line and Candlesticks
5. What do a candlestick’s body and wicks represent?
Body: the interval’s open-to-close range. Wicks: extend to the interval’s high and low.
Source: L4 Trading Strategies and Systems — Line and Candlesticks
6. What distinguishes a rising candle from a falling candle?
Rising: close above open. Falling: close below open.
Source: L4 Trading Strategies and Systems — Line and Candlesticks
7. What does the interval of a candlestick chart determine?
The period represented by each candle, e.g. 5 minutes, 15 minutes or 1 day.
Source: L4 Trading Strategies and Systems — Line and Candlesticks
8. What do X and O columns represent in a Point and Figure chart?
X: rising prices. O: falling prices.
Source: L4 Trading Strategies and Systems — Point and Figure
9. What does box size mean in a Point and Figure chart?
The price move represented by each X or O; smaller moves are ignored.
Source: L4 Trading Strategies and Systems — Point and Figure
10. What does reversal count mean in a Point and Figure chart?
The number of boxes price must move in the opposite direction to start a new column.
Source: L4 Trading Strategies and Systems — Point and Figure
11. What does ATR stand for, and how is it used in the note’s Point and Figure chart?
Average True Range. It can set box size based on volatility.
Source: L4 Trading Strategies and Systems — Point and Figure
12. What price input is used for the Point and Figure chart described in the note?
Closing prices.
Source: L4 Trading Strategies and Systems — Point and Figure
13. What is the stated trade-off of Point and Figure’s noise filtering?
Fewer false breakouts, but later signals.
Source: L4 Trading Strategies and Systems — Point and Figure
14. Which technical-analysis principles can still be applied to Point and Figure charts?
Trends, support/resistance and breakouts.
Source: L4 Trading Strategies and Systems — Point and Figure
15. What is a Renko chart?
A price-based chart made of bricks of a chosen price size. New bricks appear when price crosses the required thresholds; small moves produce no new brick.
Source: L4 Trading Strategies and Systems — Renko and Kagi
16. How can Renko brick size be set, and what is the effect of larger bricks?
Fixed or based on ATR. Larger bricks filter more noise but delay signals.
Source: L4 Trading Strategies and Systems — Renko and Kagi
17. In the Renko construction described in L4, how large is the move needed for a reversal brick?
Two brick sizes in the opposite direction from the last brick’s closing edge.
Source: L4 Trading Strategies and Systems — Renko and Kagi
18. What is a Kagi chart?
A price-based chart of connected vertical lines. The current line extends as price continues in the same direction and reverses only when an opposite move reaches the chosen reversal amount.
Source: L4 Trading Strategies and Systems — Renko and Kagi
19. How are opposite-direction vertical lines connected on a Kagi chart?
By a short horizontal line.
Source: L4 Trading Strategies and Systems — Renko and Kagi
20. What does a Kagi chart’s filtering help reveal?
Larger price swings and support/resistance, by filtering small fluctuations.
Source: L4 Trading Strategies and Systems — Renko and Kagi
21. Why does the note suggest using chart types together?
Candlesticks show timing and OHLC detail, while price-based charts help reveal the broader trend.
Source: L4 Trading Strategies and Systems — Renko and Kagi
22. What is the sequence in the vectorised backtesting system shown in L4?
Database → raw OHLC data via yfinance API → prepare data → strategy signals → PNL/equity curve → analysis.
Source: L4 Trading Strategies and Systems — Vectorised Backtesting System — embedded workflow screenshot
23. What happens in the ‘Prepare data’ stage of vectorised backtesting?
Create a dataframe to store features and prepare the indicators/features required by the strategy.
Source: L4 Trading Strategies and Systems — Vectorised Backtesting System — embedded workflow screenshot
24. How does the shown backtesting system register strategy signals?
Use if-else statements to record buy/hold/sell in a dataframe column, typically as 1/0/−1.
Source: L4 Trading Strategies and Systems — Vectorised Backtesting System — embedded workflow screenshot
25. What determines PNL or the equity curve in the shown backtesting system?
Actual returns and the position held.
Source: L4 Trading Strategies and Systems — Vectorised Backtesting System — embedded workflow screenshot
26. What is produced in the analysis stage of the shown backtesting system?
Metrics, graphs and figures.
Source: L4 Trading Strategies and Systems — Vectorised Backtesting System — embedded workflow screenshot
27. What does an API do, according to L4?
Connects two systems/programs; APIs are bundled in libraries.
Source: L4 Trading Strategies and Systems — API’s
28. Which API/data-library examples are listed in L4?
Yahoo Finance, Google Finance, Quandl, AlphaVantage and pandas datareader.
Source: L4 Trading Strategies and Systems — API’s
29. What is the difference between yf.Ticker(…) and yf.Tickers(…) in the notebook?
Ticker creates an object for one symbol. Tickers handles multiple symbols.
Source: L4 Trading Strategies and Systems — Notebook Screenshots
30. Which ticker attributes/methods retrieve stock information and historical prices in the notebook?
stock_data.info retrieves stock information; stock_data.history(…) retrieves historical prices.
Source: L4 Trading Strategies and Systems — Notebook Screenshots
31. What two ways of specifying a historical-data window are shown in the notebook?
A lookback period, e.g. period = ‘1y’, or explicit start and end dates.
Source: L4 Trading Strategies and Systems — Notebook Screenshots
32. Which column is selected when plotting the notebook’s line chart?
The Close column.
Source: L4 Trading Strategies and Systems — Notebook Screenshots
33. Which four metrics does the BASS function return, in order?
Beta, alpha, standard deviation and annualised Sharpe ratio.
Source: L4 Trading Strategies and Systems — BASS Notebook Screenshots — Prepare prices and returns
34. What inputs does the BASS function take?
Stock symbol, benchmark symbol, start date and end date.
Source: L4 Trading Strategies and Systems — BASS Notebook Screenshots — Prepare prices and returns
35. What does pct_change() calculate from the closing-price columns in the BASS notebook?
Regular/simple returns between consecutive observations.
Source: L4 Trading Strategies and Systems — BASS Notebook Screenshots — Prepare prices and returns
36. What is the role of dropna() in the BASS data preparation?
Remove rows containing missing values.
Source: L4 Trading Strategies and Systems — BASS Notebook Screenshots — Prepare prices and returns
37. How is beta calculated in the BASS notebook?
Covariance of stock and benchmark returns divided by the variance of benchmark returns.
Source: L4 Trading Strategies and Systems — BASS Notebook Screenshots — Beta
38. How does the alternative beta calculation use the returns covariance matrix?
Divide the stock–benchmark covariance entry by the benchmark-variance entry.
Source: L4 Trading Strategies and Systems — BASS Notebook Screenshots — Beta
39. How does the BASS notebook estimate annual returns from daily returns?
Mean daily return × 252.
Source: L4 Trading Strategies and Systems — BASS Notebook Screenshots — Alpha and standard deviation
40. How does the notebook calculate annualised alpha in percentage units, assuming a zero risk-free rate?
(Annualised stock return − beta × annualised benchmark return) × 100.
Source: L4 Trading Strategies and Systems — BASS Notebook Screenshots — Alpha and standard deviation
41. How is the notebook’s standard deviation calculated, and what are its units?
Standard deviation of daily stock returns × 100. It is daily standard deviation in percentage units, not annualised.
Source: L4 Trading Strategies and Systems — BASS Notebook Screenshots — Alpha and standard deviation
42. What CAGR formula is stated in the notebook comments for data spanning more than a year?
CAGR = (final price / initial price)^(1/t) − 1, where t is the number of years.
Source: L4 Trading Strategies and Systems — BASS Notebook Screenshots — Alpha and standard deviation
43. How does the notebook calculate daily Sharpe ratio, assuming a zero risk-free rate?
Mean daily stock return / standard deviation of daily stock returns.
Source: L4 Trading Strategies and Systems — BASS Notebook Screenshots — Sharpe ratio
44. How does the notebook annualise daily Sharpe ratio?
Daily Sharpe ratio × √252.
Source: L4 Trading Strategies and Systems — BASS Notebook Screenshots — Sharpe ratio
45. What risk-free-rate assumption is used for alpha and Sharpe in the notebook?
A zero risk-free rate.
Source: L4 Trading Strategies and Systems — BASS Notebook Screenshots — Sharpe ratio
46. Does the notebook’s Sharpe calculation require benchmark returns?
No. It uses the stock’s own returns and standard deviation and can be used to compare stocks/portfolios.
Source: L4 Trading Strategies and Systems — BASS Notebook Screenshots — Sharpe ratio
47. In which order does sort_values(by=‘sharpe’, ascending=False) rank stocks?
Highest to lowest Sharpe ratio (descending).
Source: L4 Trading Strategies and Systems — BASS Notebook Screenshots — Calculate and rank the stocks
48. Why does the notebook wrap each stock’s BASS calculation in try/except?
To continue processing the remaining stocks if a symbol has no available data or raises an exception.
Source: L4 Trading Strategies and Systems — BASS Notebook Screenshots — Calculate and rank the stocks
49. What is a passive (static) strategy, and what is its objective?
Buy and hold with minimal security/strategy selection; capture market returns without frequent adjustments.
Source: L4 Trading Strategies and Systems — Passive vs Active
50. What passive-strategy examples does L4 give?
Index funds and ETFs tracking the S&P 500.
Source: L4 Trading Strategies and Systems — Passive vs Active
51. What is an active (dynamic) strategy, and what is its objective?
Frequent decision-making and trading; beat the market, outperform benchmarks or exploit inefficiencies.
Source: L4 Trading Strategies and Systems — Passive vs Active
52. What active-strategy examples does L4 give?
Hedge funds, discretionary traders and quant funds.
Source: L4 Trading Strategies and Systems — Passive vs Active
53. What is the idea-first (deductive) approach to strategy development?
Start with a hypothesis, intuition or theory, then use data to test or validate it.
Source: L4 Trading Strategies and Systems — Idea First or Data First
54. What is the data-first (inductive) approach to strategy development?
Start by mining patterns/signals in large datasets; a theory may come afterward to explain the pattern.
Source: L4 Trading Strategies and Systems — Idea First or Data First
55. Which idea-first examples are listed in L4?
Momentum due to investor herding; activity before weekends/lunch breaks; the first hour of trading.
Source: L4 Trading Strategies and Systems — Idea First or Data First
56. Which data-first approaches are listed in L4?
Machine learning and extensive quantitative research.
Source: L4 Trading Strategies and Systems — Idea First or Data First
57. What timescale and sources of advantage characterize fast strategies in L4?
Seconds to minutes; microstructure, speed and execution edge.
Source: L4 Trading Strategies and Systems — Fast vs Slow
58. Which fast-strategy examples does L4 give?
High-frequency trading, scalping and intraday strategies.
Source: L4 Trading Strategies and Systems — Fast vs Slow
59. What timescale and signals characterize slow strategies in L4?
Hours to days to months; broader economic, fundamental or trend signals.
Source: L4 Trading Strategies and Systems — Fast vs Slow
60. Which slow-strategy examples does L4 give?
Intraday trades, swing trades, position trades and macro bets.
Source: L4 Trading Strategies and Systems — Fast vs Slow
61. How does L4 contrast the win patterns associated with negative and positive skew?
Negative skew: more wins, but small wins. Positive skew: fewer wins, but big wins.
Source: L4 Trading Strategies and Systems — Positive or Negative Skew — text and embedded screenshots
62. Which examples does L4 associate with negative skew?
Mean reversion, selling options, market making and an insurance seller.
Source: L4 Trading Strategies and Systems — Positive or Negative Skew — text and embedded screenshots
63. Which examples does L4 associate with positive skew?
Trend/momentum strategies, buying options and an insurance buyer.
Source: L4 Trading Strategies and Systems — Positive or Negative Skew — text and embedded screenshots
64. What is mean reversion?
Asset prices return to their long-term average.
Source: L4 Trading Strategies and Systems — Mean Reversion or Momentum
65. What is momentum, according to L4?
Continued rate of change of prices in the same direction.
Source: L4 Trading Strategies and Systems — Mean Reversion or Momentum
66. What information distinguishes technical and fundamental approaches in L4?
Technical: price action. Fundamental: micro-to-macro data.
Source: L4 Trading Strategies and Systems — Trading Strategies
67. What does L4 associate pairs trading with?
Disturbed correlation between pairs.
Source: L4 Trading Strategies and Systems — Other Popular Strategies
68. What does L4 associate arbitrage with?
Inefficiencies in markets.
Source: L4 Trading Strategies and Systems — Other Popular Strategies
69. What phrase does L4 use to describe market making?
“Spread betting.” (The wording used in the note.)
Source: L4 Trading Strategies and Systems — Other Popular Strategies
70. What do candlestick-pattern strategies reflect, according to L4?
Trading sentiment.
Source: L4 Trading Strategies and Systems — Other Popular Strategies