Quantitative Trading

Quantitative trading means trading (buying and selling securities such as stocks) using certain specific strategies. We use math and Big Data (large amounts of data) to discover patterns in their movement. The trading is sometimes automated (run by a computer without humans).

A very simple example : Buy Tesla shares today if the stock has risen continuously for the past 3 days. We can calculate how likely it is that this strategy might work. For the past 2 years, how many times did the stock rise on the 4th day after a continuous rise for 3 days?

Quantitative trading involves the below steps:
1. Gather Data
2. Backtest strategy (Check if a strategy could have worked in the past)
3. Strategy Execution (Trade using real money)
4. Manage risk (Try to limit your losses)

Quantitative Trading includes:
    – Low Frequency Trading
    – High Frequency Trading
    – Statistical Arbitrage
    – Algorithmic Trading

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