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Total Posts: 4
Joined: Sep 2017
Posted: 2017-09-25 13:47
1. In my understanding a successful quant trading business is heavily focused on research and development. The R&D cycle never stops because algos lose their edge as markets and/or the edge gets arbed away. A company's long-term success depends on having a solid R&D process as well as talented staff that can constantly come up with new and improve existing algos.

2. If I don't like the process of developing algos and just like the pretty equity curves then this business is not for me.

Is the above correct?


Total Posts: 43
Joined: Jun 2017
Posted: 2017-09-26 21:26
Succesful quant trading is any trading business that rely on mathematics or programming to make/execute +$EV trading decisions, as well as to manage risk and capital effectively.

1. Surely, exotics desks, algorithmic market makers, "sophisticated" portfolio managers, as well as stat-arb and HFT shops, etc. etc. could all be considered quant traders. Population tendency is not at all to be R&D heavy.

2. Not sure what "pretty equity curves" mean, but most equity portfolio managers are not quant traders.


Total Posts: 21
Joined: Sep 2017
Posted: 2017-09-27 01:17
You're not wrong, but there is a special usage of the term "quantitative trading" that is used to refer to algorithmic trading in public equity shares, especially around the microstructure. This dovetails with high frequency trading. The purpose can be to generate alpha, replicate a benchmark, or provide liquidity.
In the broader sense that you are referring to, almost anything could be considered a form of quant trading ... either complicated strategies using simple instruments, or simple strategies using complicated instruments.


Total Posts: 4
Joined: Sep 2017
Posted: 2017-09-28 04:10
Poker player? :)


Total Posts: 4
Joined: Sep 2017
Posted: 2017-09-28 04:12
I feel like the meat of my question was kind of missed and we got into hairsplitting. My question is about algorithmic trading regardless of timeframe or instruments. Does it involve constant R&D? Etc.


Total Posts: 1765
Joined: Jul 2004
Posted: 2017-09-28 05:40
In my experience, the answer is:
Quant trading is about building a pipeline that turn ideas into trading strategies into trading decisions into positions.

Depending on the frequency you operate at, the pipeline gets bigger or smaller (some HFT desks are basically continuously updating their strategies, lower freq. could keep parts of the strategy unchanged for years).

One competitive advantage lies in having a fast pipeline where the time to market of an idea is short.
Another one is to know what parts need to be repassed through the pipeline and when and what bit can stay unchanged for longer.

At pretty much every stage of that operation, quantitative approach is used (some qualitative can be as well. It is sometimes blurred as the choice of the measure is as important as the actual value of that measure).

That's my experience

Qui fait le malin tombe dans le ravin


Total Posts: 4
Joined: Sep 2017
Posted: 2017-10-01 10:32
OK that's more or less what I envisioned.
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