Quantitative trading is sometimes called automated trading, which refers to the use of advanced mathematical models to replace human subjective judgments, the use of computer technology for data analysis, and the formulation of investment strategies, which greatly reduces the impact of investor sentimental fluctuations and avoids market failure. Investors make irrational investment choices when stable investment is frenzied or pessimistic.
There are many types of quantitative trading, including cross-platform moving bricks, trend trading, hedging, etc. Cross-platform moving bricks refers to when there is a higher price difference between different trading platforms, buy on the lower price platform, and buy on the higher price platform. Selling, that is, buying low and selling high, earning the difference, this behavior is vividly called brick-moving.
Trend trading is relatively more complicated. It uses a computer-set program, intelligently based on market conditions and trend indicators, and when the price or quantity reaches a certain value, it sends out sell and sell signals to automatically trade or remind users to trade . Hedging refers to the simultaneous conduct of two transactions on one or different platforms, two transactions related to the market, opposite trading directions, and the
When the profit and loss balance the transaction, in order to achieve the effect of hedging risks. Quantitative trading is a sign of a mature trading market.
The advantages of quantitative trading are compared with the manual operation of checking the market, making judgments, and then making transactions. Quantitative trading can be called a "black technology".
On the one hand, quantitative trading greatly reduces the impact of investor sentiment fluctuations and effectively prevents investors from making irrational investment decisions when the market is extremely fanatical or pessimistic. We often say that good investment behaviors are often anti-human and need to overcome the two human weaknesses of "greed" and "fear."
Quantitative transactions that make decisions by models and procedures can do this well, unconditionally execute the pre-set indicators, and buy or sell without emotion when the conditions are met, making the investment behavior stronger Discipline.
On the other hand, automatic program operation is more accurate, timely, and efficient than manual operation, so it is more able to seize fleeting investment opportunities.
Compared with the stock market, although the trading depth of the currency market is not as good as that of the stock market, its 7*24 hours uninterrupted market and numerous different trading platforms have more arbitrage opportunities for quantitative investment.