Quantitative trading is also a kind of transaction. "Quantitative trading" has two meanings: one is quantitative trading in a narrow sense, which refers to the content of converting trading conditions into procedures and automatically placing orders; the other is a systemic trading method in a broad sense, which is An integrated trading system. which is
According to a series of trading conditions, the intelligent decision-making system combines rich experience with trading conditions to manage risk control in the transaction process. I believe that through the above explanation, we can have a clear understanding of what quantitative trading is.
From the most basic needs, there are two major needs for investors' trading methods. One is the requirement of time. There are not only market time but also transaction time. The market time also includes refresh frequency and transaction delay. The other is adaptation to trading behavior.
From the time point of view, the speed market system and the speed trading system can provide the best quantitative trading driving force and the best quantitative trading execution power. The transaction delay is refreshed every 3 seconds and the data is first seen 500 milliseconds faster than others. It is a great time advantage.
Quantitative trading actually has three levels.
The first level is the usual quantitative stock selection and strategy. This is the first level.
The second level is to combine quantification and trading, especially in CTA strategies like futures. Of course, we do not have an open interface for brokers. If we can automatically combine quantitative strategies and programmatic transactions to realize the integration of knowledge and action, this kind of quantitative trading should belong to the second level, which is already common in foreign countries.
The third level is the development of artificial intelligence in quantitative trading, that is, machines or some artificial strategies can learn automatically. According to the rules of the stock market and macroeconomic conditions, it can automatically develop some strategies. This is a more advanced strategy.
This is currently a stage of development. In our country, it generally belongs to the first stage, and the second stage has some applications in some futures markets.
Advantages of quantitative trading
1. Strict discipline
Quantitative trading has strict discipline. Doing so can overcome the weaknesses of human nature, such as greed, fear, and fluke. It can also overcome cognitive bias.
2. Complete systemicity
The complete system is concretely manifested as "three mores". First of all, it is manifested at multiple levels, including the three levels of asset allocation, industry selection, and selection of individual stocks. We have models; secondly, the core investment ideas of quantitative trading include macrocycles, market structure, valuation, and growth. , Earnings quality, analyst earnings forecasts, market sentiment, and many other angles; the other is multiple data, which is the processing of massive data.
3. Proper use of arbitrage ideas
Quantitative trading is just looking for valuation depressions, through comprehensive and systematic scanning to capture the opportunities brought by mispricing and misvaluation.
4. Win by probability
This is manifested in two aspects. One is that quantitative investment continuously digs out historical laws that are expected to be repeated in the future and uses them. The second is to use probability analysis in the actual operation of stocks to improve the probability of successful trading and position control.
Quantitative investment is also called algorithmic trading, which is a transaction carried out in accordance with the transaction management decision derived from the algorithm design procedure. To put it simply, it means to use the mathematical entity model and the electronic computer method to maintain the efficiency coefficient method of your own project investment ideas.