In this article we want to go further and face with “what you must know about Quantitative Trading”.
this can help us to understand which kind of trading is the best solution for us.
“The goal of a successful Trader is to make the best Trades. Money is secondary”
what you must know about Quantitative Trading is Trading strategies that are based on quantitative analysis , are what make this trading happen.
such analysis relies on mathematical computations and two of the most common inputs used in quantitative analysis are called price and volume.
Financial institutions ad hedge funds welcome quantitative trading the most and although transactions take place in large amounts.
also, this type of trading is becoming more common among individual investors.
In addition to price and volume being the man inputs to mathematical models, there are three particular techniques involved in quantitative trading including high-frequency trading, algorithmic trading and statistical arbitrage and other quantitative tools.
such as moving averages and oscillators which are more familiar to many traders.
Mechanism of Quantitative Trading
in order to,To take our understanding about quantitative trading to deeper levels, we must know its mechanism.
Quantitative Trading allows traders to take advantage of modern technology, mathematics and the accessibility to comprehensive databases in order to end up in making rational trading decisions.
Quantitative Trading applies back-tested data to various trading scenarios and financial market to look for opportunities which result in major profit and therefore it eliminates chances of emotional decision making during trading.
Let’s give a fairly simple example of quantitative trading:
Imagine a trader who believes in momentum investing, chooses to write a simple program which picks out winners in an upward momentum in the markets.
therefore, the program buys those stocks during the next market upturn
Why Algorithmic Trading?
Algorithmic trading is the process of using computer programs or bots to follow a set of instructions. It allows fully automatic placing of a trade. The aim is to generate gains at a speed and frequency that is not possible for a human being. Algo trading also provides more liquidity and makes trading systematic by eliminating the effect of human emotions on a trade. Timing, price and quantity are the underlying factors that determine the set of rules.
Advantages and Benefits of Quantitative Trading
Quantitative trading can result in a profitable trade by using computers to automate the monitoring, analyzing and trading decisions.
which focuses on a limited number of securities before the amount of incoming data overwhelms the decision-making process.
also, The other benefit of using computers and mathematics is that they do not possess emotions and avoid overcoming emotions in decision thinking by intrinsically.
You face the Minimal chances of errors in placing the trade and the costs of transactions will be low.
Crypto Trade Bots
it’s possible to build a systematic trading framework that offers a lot of market benefits while also reducing the odds of trader error by integrating algorithms. Trades for coins and tokens automatically executed according to predetermined conditions.
QuantVan helps cryptocurrency traders run their own programs called bots. Trading bots are software programs designed to communicate with exchanges and execute trades on your behalf. Bots also can directly access an exchange’s order books through a simple API and can be designed with specific features and purposes in mind.
Types of Trade Bots
- Inter-exchange arbitrage bots (for those who use multiple exchanges).
- Basic trade bots, which configured to follow all sorts of pre-determined strategies.
- Stop loss bots, which automatically sell at a certain fixed or dynamic price.
- Flash crash bots, which take advantage of temporary crashes in the value of a token or coin.
You can run your own Bots on Quantitative Trading platform of Quantvan and enjoy of the systematic trading frame work that provided for you.
QuantVan is a platform based on algorithmic or quantitative Trading that gives the users all they need for an Online and Profitable Trading.
check out our blog to read more posts about Cryptocurrency, here on Quantvan Academy.