The Workshop · The Trade Desk · one trade at a time · 3 of 11
The trade made its number. How much of that was the stock, and how much was the tide?
SHOP finished the trade at +18.6%. Over the same 21 sessions the market (SPY) did -0.5% and SHOP's own sector fund (XLK, Technology) did -6.7%. Switch the lines on and off and watch the one that matters appear.
Buy any stock and you own three things at once: the market, its sector, and the company. The first two you could have bought for the price of an index fund. The desk's whole premise is that the third one, the part the stock earned on its own, is where the information is, and it is the only part a trade should be judged on. For SHOP that part came to +27.1% against its sector (+19.2% against the market): the trade was not the tide.
Inside the hold there was a session, Oct 1, 2026, when SHOP rose +0.53% and its sector fund rose +1.05%. The headline said up. Relative to its own sector the name lost ground that day, and Alpha fell 1 points. A stock can go up and read weak; it can fall and read strong. The desk reads the second thing.
Key insight. Relative value is the part of the move the stock earned. Every number on the desk is scored on that part: Alpha, the runs, the pairs, the record. The tide is not a skill.
Once you see a return as three parts, hedging stops being exotic. A weak name on the desk is not shorted on its own; it is held against its sector fund, so the sector's move and the market's move cancel and what remains is the name's own weakness, the thing the read was about. A pair is the same idea twice: a strong name against a weak one in the same sector, the market subtracted on both sides. Lesson 7 builds one.
Every ticket's chart draws exactly these lines: the name against the market and against its sector, with the own move as the line that is left. The manual's chapter: True strength, the relative strength chart.
Keep this: a return is market, sector and the stock's own move. Only the third is earned, and only the third is what TradeMath scores.
Analytical tools and historical measurements for educational and informational purposes only; not investment advice or a recommendation. Replayed figures are hypothetical: today's rules applied to past prices, after modelled costs, and no account was traded on them. Hypothetical results have inherent limitations and do not represent actual trading. Past performance, including backtested results, does not guarantee future outcomes. Trading stocks involves substantial risk of loss.
The Workshop is education, not advice. Replayed numbers are averages over many trades, after average trading costs (2 bps a side on a stock, 1 on a fund, included for fairness; yours vary by broker and liquidity) unless stated, and are not forecasts; the live record is on the engine page. Analytical tools and historical measurements for educational and informational purposes only; not investment advice or a recommendation. Replayed figures are hypothetical: today's rules applied to past prices, after modelled costs, and no account was traded on them. Hypothetical results have inherent limitations and do not represent actual trading. Past performance, including backtested results, does not guarantee future outcomes. Trading stocks involves substantial risk of loss. About · Support · Terms · Privacy · Refunds Open the deskManualThe EngineChangelog