Quantitative Trading:Identifying a StrategyBy Nir Ronen

For years, trading was a manualaffair. Individual traders wouldtrack markets, wait for the besttime to act, then make a call to the

floor.

In the 1990's e-trading began toemerge, and by the 2000's

automated platforms had comeinto their own.

Successful quant trading relies ona multi-step approach.

First up? Finding a reliablestrategy.

Whyis strategy important?

Imagine you're managing your own portfolio

and using a mobile app to place orders and

trade throughout the day. Chances are you're

taking time to look up related news before

making you move.

Quantitative Trading

Going in Blind

When coming in from aquantitative angle, you'reconcerned with finding analgorithm that can do that for you.So, you pour over data to help youidentify an algorithm that canpredict-- and respond to--

fluctuations in price.

Why botherwith analgorithm?

Let's revisit the mobile app scenario from

earlier. At any given point, you may be tracking

two or three securities at a time. But by having

a program make those decisions. With an

algorithm? You can trade thousands. By not

focusing on individual details, your resources

are free to use on perfecting a platform that will

make consistently good decisions.

Quantitative Trading