What Are the Different Types of Quantitative Trading Strategies?

Quantitative investment strategy is a general term for strategies and algorithms for analyzing, judging, and trading financial markets using quantitative methods.

Quantitative Investment Strategy

(Economic term)

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What is quantitative investment? In fact, just like the difference between traditional Chinese medicine and western medicine, traditional Chinese medicine relies on experience and pays attention to "looking, smelling, asking, cutting, listening". Western medicine relies on indicators to comprehensively judge the condition through a series of inspection data. Quantitative investment is nothing more than driving investment and trading with indicators and formulas. Take the example of Taobao, the seller needs to consider arranging customer service equipment and merchandise logistics arrangements for Double Eleven. If the seller judges based on experience, "there are more buyers at noon" to double the customer service at noon and make an appointment for logistics. Qualitative investment. If the seller uses cloud computing to model and analyze his sales data for Double Eleven, he finds that the period of "11:25 to 12:15, 12: 45-13: 30" is the most active transaction, and therefore doubles customer service and appointment Logistics, this is the quantitative investment in micro-networks.

In 2010, China introduced stock index futures. For the first time, we had the tools to short the market, which provided the basis for designing complex algorithms based on algorithms. Therefore, in 2010 we called the first year of hedge funds and quantitative investment. With the launch of stock index futures, four products related to quantitative investment have flourished. The first is an alpha hedging product for long stocks and short stock index futures; the second is to take advantage of the fact that stock index futures can be bought and sold multiple times in the day, using technical analysis and programmatic trading of stock index futures, so-called programmatic CTA products; The third is to trade stock index futures with complex algorithms and high frequency in a very short period of time, so-called high-frequency trading products; the fourth is to conduct spread trading on stock index futures and their spot ETFs / stocks. Of course, these high-end quantitative tools require a lot of computer and scientific research investment, so they are mainly in the hands of professional institutions. The significance of quantitative investment is that technology and engineering forces have entered the wealth management industry. People can choose not only public funds that follow the market, but also so-called absolute income wealth management products.

Quantitative investment in the era of cloud computing

After the first year of quantitative investment, many relevant professionals who are interested in it have joined the development camp of quantitative investment strategies. Compared with the limited asset management institutions and product requirements, there has been a periodical surplus of talents and strategies, which needs a way out. On the other hand, there is a large group of customers who are not interested in purchasing wealth management products directly and hope to participate in the process of their wealth management through securities and futures accounts, but they do not have much time to take care of their accounts. The market needs a platform for policy providers and financial managers who need to rent a strategic model so that they can trade; after renting a model, financial managers also need a powerful model environment to ensure the normal operation of the strategy. This is the era of cloud computing Quantitative investment, the so-called "cloud trading". Micronet is a specific mass application of the above-mentioned cloud transaction.

In an era of innovation and change, information technology, engineering technology, the Internet, the Internet of Things, and even the Internet of Things have changed the way people live, eat, live, and live. Nowadays, these technologies have also gradually penetrated into the pinnacle industry of intellectual gaming-wealth management industry. In the science fiction films of the last century, those clumsy robots were like heaven and earth. In the era of rapid development, those images have now become antiques. Renting a robot to invest in financial management has become a reality, but as in recent movies, will there be a "robot" that is exactly the same as humans and also has the ability to self-evolve? Of course, the source of thought for quantitative investment is ultimately human. Quantitative investment in the era of computing and big data takes the imagination of investment a step further, simplifying our lives and meeting our needs. This allows everyone to see some hope for technological progress. ^[2]

2.1 Trend judgment type quantitative investment strategy

Judging the trend type is a high-risk investment method.

Quantitative Investment Strategy Algorithm Trading

Algorithmic trading, also known as automatic trading, black box trading, or machine trading, refers to the use of computer programs to issue trading instructions. 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 securities that need to be finalized.

According to the degree of activeness of algorithms in various algorithmic transactions, algorithmic transactions can be divided into three categories: passive algorithmic transactions, active algorithmic transactions, and comprehensive algorithmic transactions.

Quantitative investment strategy alternative arbitrage

They are event arbitrage, ETF arbitrage, LOF arbitrage and high-frequency trading.