Quantitative Trading

Quantitative trading is a trading strategy that uses mathematical models and algorithms to identify and execute trades.

Quantitative trading, also known as algo trading, is a method of executing orders using automated pre-programmed trading instructions that take into account variables like time, price, and volume. This type of trading aims to use mathematical models and formulas to identify trading opportunities and execute trades when certain market conditions are met. Quantitative trading can be applied in all financial markets, including stocks, futures, forex, and also cryptocurrencies. High-frequency trading (HFT), a type of quantitative trading, is known for using sophisticated algorithms and high-speed data networks to execute rapid market trades.

Example:

Developing a high-frequency trading algorithm for trading Bitcoin on a crypto exchange.
An example of a quantitative trading strategy could be a mean-reversion trading strategy. This strategy assumes that the price of an asset will revert to its average over time. So, if the price of a cryptocurrency drops below its average, a quantitative algorithm might identify this as a buying opportunity.

‍

Quantitative Trading

Example:

Related Terms:

Category: