WHAT IS QUANTITATIVE TRADING? – HOW MONEY IS MADE THROUGH MATH
1. What is Quantitative Trading?
Quantitative trading is a method that uses algorithms, statistics, and mathematical models to make buying and selling decisions in financial markets—such as stocks, cryptocurrencies, and forex.
Instead of relying on emotions or news, quantitative traders base their decisions on historical data and computational tools to build strategies with high probability of success.
2. How Does Quantitative Trading Work?
The process typically includes 4 main steps:
Data Collection: Gather price data, trading volume, fundamental or technical information from markets.
Model Development: Apply statistical techniques, machine learning, or mathematical logic to find patterns and build strategies.
Backtesting: Test the model using historical data to evaluate its performance.
Live Execution: If the model performs well and has controlled risk, it’s deployed in real trading via automation or trading bots.
3. Advantages of Quantitative Trading
Discipline: Eliminates emotional decision-making.
Speed: Can process thousands of trading signals per second.
Quantitative trading isn’t an easy road, but it gives you a real edge in the market through knowledge and data. In an era ruled by AI and big data, those who master algorithms will master profits.
#CEXvsDEX101 In the world of cryptocurrency, exchanges (exchanges) play an important role in buying and selling digital assets. The two most popular types of exchanges are centralized exchanges (CEX) and decentralized exchanges (DEX).
#TradingTypes101 Understanding the different types of transactions is the first step in building a comprehensive information strategy. Spot, Margin, and Futures trading each offer unique advantages and risks. The choice of which one to use depends on your goals, experience, and risk appetite.