At Ambrus the core philosophical approach is to focus on areas that are exhibiting "extreme" behavior. Human's have the tendency to look at markets in a close ended form. Especially when things are at extremes. We naturally underestimate the potential distribution of outcomes.

If you are a follower of Mandelbrot's work then you understand that at these "extreme areas" the distribution of outcomes potentially increase. Naturally humans think in the form of "this is too high/low it must go down/up. Give a human a chart and they focus on the max and min.

This presents areas of "mispricing" which is something every trader should be focused on...the most beautiful "trade" to me is when something is greater than 2σ and everyone piles on to fade it b/c they think it cant go 4σ..which creates the feedback loop to make it 6σ in the end