Factor models are widely used in the funds management industry. However, the out-of-the-box softwares usually carries a hefty price tag and only accessible to institutions. Building your own Python implementation of factors model means you can be more flexible in formulating your unique trading strategies -- to set you apart from the crowd!

In this 2-part series, we will build things from the ground up and get a deep understanding of the inner workings of factor models. We'll show you:

• the selection of predictors/factors,

• how to combine technical indicators to create factor models,

• the process of factors model formulation,

• how to evaluate the performance of the factor-based strategy,

• how to build a ranking scheme to improve the strategy performance,

• the creation of a long/short portfolio, and 

• tips on validation so that you can be confident that your strategy is fit for live trading...