What is quantitative trading? Why learn about quantitative trading?

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No matter what you call it, "quantitative trading", "algorithmic trading", "programmed trading", "automated trading", "robot trading", or "black box trading", when these names are mentioned, most people's minds The image that immediately comes to mind may be the image of "Frankenstein" -- some geniuses with extremely high IQs and thick lenses, surrounded by a large number of computer monitors, typing on the keyboard, using mysterious mathematical formulas, in the Frequent trading between countless varieties of trading instruments can create huge wealth in an instant, but always bring destruction in the end

Indeed, most people, including many senior investors, have a respectful and awe-inspiring attitude towards quantitative trading. On the one hand, I feel that it is unpredictable, and I admire it; on the other hand, I feel that it is full of risks and fear. But in fact both attitudes are completely unnecessary.

Why Learn Quantitative Trading

Some people may think that I am doing fundamental analysis and value investing. What does quantitative trading have to do with me? Indeed, you can be a great investor even if you have never heard of quantitative trading. However, with the development of the market and technology, it is very necessary for investors and intermediary companies such as securities companies to have an understanding of quantitative trading.

Investors: Discovering new spaces and opportunities

No matter what investment strategy you employ, as with anything, one of the most important factors in determining success or failure is the competition you face. Thirty years ago in China, almost everyone was counting waves, and no one cared about the fundamentals of the company. Many listed companies such as Sichuan Changhong and Qingdao Haier continue to double their profits, but their price-earnings ratios are in single digits. When you go to a listed company for research, no one knows what you are here for, and you won't see a few shareholders at a general meeting of shareholders. At that time, it was a good time to do value investing, because there was almost no competition.

But today, everyone is a value investor, everyone is studying financial statements, and everyone is doing company research. Obviously, the competition for value investing is greatly intensified. At the same time, it can be said that quantitative trading is still at a very early stage. Although there are some people trying to do this, on the whole, the scale is still quite small, and there is still a lot of room for entry, which gives quantitative Traders provide room to play.

Investors: Optimizing Current Investment Strategies

James Simons, the founder of Renaissance Technologies, the most successful quantitative trading fund at present, said that the greatest contribution of those mathematicians and physicists who are engaged in quantitative trading is not their The theoretical knowledge they hold, but the scientific spirit they bring. As mentioned earlier, most quantitative trading strategies are actually derived from existing strategies. But when you have to quantify all aspects of an investment strategy, you have to think more deeply about all aspects of the strategy.

Buffett and Munger seem to have nothing to do with quantitative trading at all, but to a certain extent, it can be said that they themselves are human versions of quantitative trading machines. Buffett has always emphasized that the most important thing in investing is to be rational and not let emotions affect your investment decisions. Munger emphasized that investment judgment should be made in the form of a "list". These are similar principles to quantitative trading. When you haven't practiced the skills of rational judgment like Buffett and Munger, understanding the principles of quantitative trading can effectively help you improve the rationality of your current investment strategy.

In fact, studies have shown that trading strategies based on objective criteria, on the whole, can generate more excess returns than trading strategies based on human judgment. Of course, this does not mean that you completely give up subjective judgment, after all, some things are difficult to quantify. However, by understanding the strategy of quantitative trading, it can help you rethink all aspects of your existing investment strategy, which areas can be more objective and reduce the error of subjective judgment. At the same time, it can also make you more clear, which links really depend on your subjective judgment ability.

What is quantitative trading

In a broad sense, quantitative trading is an investment decision-making method that uses quantitative data indicators to generate buying and selling decisions based on a pre-determined operational model. It is relative to the investment decision-making method based on subjective judgment. The quantitative trading I am talking about here basically refers to this broad meaning.

In practical application, our investment decisions are not necessarily 100% quantitative, nor 100% subjective. There may be objections about what counts as quantitative trading and what does not count as quantitative trading. Therefore, the quantitative trading that some people refer to may have stricter requirements than the quantitative trading that some people refer to, and it refers to some quantitative and more automated investment trading methods.

Yingshou Ai quantitative trading automatic stock trading robot:

1: Whether you can program or not, and have high-quality stock strategies, you can use our fully automatic stock trading robot

2: There are 180 quantitative factors in our robot, that is, 180 stock selection ideas, or 180 profit models, plus our original de-risk factor (to detect the inflow and outflow of main funds, buy tickets at a high price) up), you only need to click the mouse to combine quantitative factors and de-risk factors into a stock trading strategy to select and trade stocks

3: 180 quantitative factors have been back-tested and long-term real market tests, with stable and ultra-high annualized returns

4: The PTrade personal trading system used to connect with the rapid trading channel and quantitative terminal of the brokerage can better buy at the starting point

5: Set the take profit and stop loss points to overcome the weakness of human nature, buy when you should, sell when you need to sell, no hesitation, no greed, and avoid emotional operations.

6: It can run multiple strategies at the same time, easily deal with various market conditions, fully automatic trading in the true sense, one-click setting, no need to track the market, and long-term automatic operation.

Friends who are interested in quantitative trading can follow the official account [] to discuss together, learn from each other, and make progress together.