What is quantitative trading?
Baidu means: to be specific, using models for programmatic transactions. The popular point is to execute transactions through programs based on various data or your own trading ideas.
The quantitative trading system includes four main parts:
Strategy identification: search for strategies, explore advantages, and determine transaction frequency.
Back-testing: Obtain data, analyze strategy performance, and eliminate deviations.
Delivery system: connect brokers, automate transactions, and minimize transaction costs.
Risk management: optimal capital allocation, optimal reading or Kelly criterion, transaction psychology.
What are the benefits of a quantitative system?
1. Compared with traditional manual methods, quantitative trading can get results within a few minutes after a backtest. Its efficiency is hundreds of times that of traditional manual methods.
2. For manual transactions, such a large amount of verification is obviously difficult to complete, but quantitative transactions can be judged quickly and accurately. And quantitative trading can also use the principles of statistics and mathematics to objectively give results, such as the retracement rate, annualized return rate, and Sharpe ratio.
3. For quantitative trading, it can use calculations to perform real-time tracking of the entire market, without missing any trading opportunities, and greatly improving profitability