Quantitative trading system development | detailed explanation of blockchain market value management

Blockchain originated from Bitcoin. As one of the underlying technologies of Bitcoin, blockchain technology has gradually attracted people’s attention. It has the characteristics of decentralization and traceability. The most prominent advantage of quantitative transactions lies in the use of computer technology Formulate corresponding strategies, advanced mathematical models replace human subjective judgments, and minimize the impact of subjective factors that cause irrational losses in investment/capital; blockchain quantitative trading platform system, which also has blockchain and quantification Some characteristics of the transaction, the openness and transparency of transaction data, traceable sources, minimize irrational investment/capital losses.
Quantitative trading technology also aims to assess and manage different risk exposures in the trading portfolio. Sometimes there are subtle behaviors in financial security that can be ignored by human eyes. By relying on mathematical formulas, investment advisers can better identify imbalances or vulnerabilities in their portfolios, which could lead to potential losses if not addressed.
Quantitative trading is cost-effective. Investment advisors often diversify in multiple securities in different regions. The quantitative trading style aims to reduce the cost of buying and selling many securities in various transactions by simplifying these transactions.
Although quantitative trading strategies are mainly driven by computer software, they still require human factors. Financial analysts must still conduct scientific research on investment technology, which is the basis of qualitative investment. Nevertheless, quantitative investment managers generally rely less on human recommendation and investment securities evaluation, and rely more on computerized formulas.
Two major trading methods of quantitative trading
1. Statistical arbitrage
Statistical arbitrage is an arbitrage based on the historical statistical law of asset prices. It is a kind of risk arbitrage. The risk lies in whether this historical statistical law will continue to exist in the future.
The main idea of ​​statistical arbitrage is to find out the most relevant pairs of investment products, and then find the long-term equilibrium relationship (cointegration relationship) of each pair of investment products. When the price difference of a certain pair of products (the residual of the cointegration equation) When the difference) deviates to a certain extent, positions are opened, and the relatively undervalued varieties are bought, and the short-selling is relatively overvalued. After the price difference returns to equilibrium, profits are made.
2. Algorithmic trading.
Legal trading, also known as automatic trading, black box trading or machine trading, refers to the method of issuing trading instructions through the design of algorithms and computer programs. In trading, the range that the program can determine includes the choice of trading time, the price of the transaction, and even the number of assets that need to be traded in the end.