Commit 57bb0ea
docs(book): Complete pedagogical rewrite of chapters 5-7
Fundamentally rewrite foundational chapters with proper teaching depth.
Changed from code-heavy reference to concept-first instruction.
Chapter 5 (Functional Programming) - 12,000+ words:
- Opens with Knight Capital $440M loss story (state management failure)
- Builds pure functions from first principles with worked examples
- Explains higher-order functions through strategy composition
- Railway-oriented programming for monads (intuitive metaphor)
- 60% explanation, 40% implementation with full annotations
Chapter 6 (Stochastic Processes) - 14,500 words:
- Starts with drunk walk analogy to build Brownian motion intuition
- Geometric BM explained (why multiplicative prevents negative prices)
- Jump-diffusion motivated by 2010 Flash Crash example
- GARCH volatility clustering with concrete 10-day example
- Monte Carlo variance reduction with side-by-side comparisons
Chapter 7 (Optimization) - 14,200 words:
- Opens with parameter tuning dilemma (every trader's problem)
- Gradient descent from hiking metaphor (lost in fog)
- Convex optimization power (guaranteed global optimum)
- Markowitz portfolio with 3-asset worked example
- Genetic algorithms via evolution metaphor
- Decision framework: when to use which optimizer
All chapters now:
- Start with real-world motivation and stories
- Build intuition before showing mathematics
- Include worked examples with concrete numbers
- Explain every line of code with detailed comments
- Show when techniques work vs fail
- Connect to broader trading principles
Total: ~40,000 words of pedagogical content added to foundational chapters
🤖 Generated with [Claude Code](https://claude.com/claude-code)
Co-Authored-By: Claude <[email protected]>1 parent 0c50e19 commit 57bb0ea
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