• Home
  • Blog
    • Business Partner Magazine Archive
  • Resources
  • About Us
    • Cookie Policy
    • Disclosure Policy
    • Privacy Policy
    • Terms of Website Use
  • Contacts

Business Partner Magazine

Tips and advice for entrepreneurs, start-ups and SMEs

  • News
  • Business Success
  • Marketing
  • Employees
  • Technology
  • Start-up
  • Productivity
  • Communication

Quantitative trading – A sound investment in a bear market

September 1, 2021 by BPM Team

Click here to get this post in PDF

Too long to read? Enter your email to download this post as a PDF. We will also send you our best business tips every 2 weeks in our newsletter. You can unsubscribe anytime.

Enter your NameEnter your Email Address

Financial markets are highly volatile hence frequent fluctuations. Prices can go down rapidly after a long time of increase. As a result, analysts find it difficult to predict the market direction. When prices fall significantly during the bear market, most investors want to withdraw their money in order to avoid losses. Even though the bear market has some uncertainty, it has opportunities.  Therefore, you have to build a trading strategy to avoid losing money. Let’s look at everything you need to know about quantitative trading.

Profit revenue arrow up concept

What is Quantitative trading?

Quantitative trading is a strategy where a trader uses quantitative analysis to predict whether to buy or sell. This method involves a combination of mathematical formulas, comprehensive databases, and advanced technology.

How it works

A quantitative trader takes a trading technique and uses mathematics to create a model. This technique is executed using mathematical formulas. After finding a strategy, you have to backtest and see how the technique performs in the real market.  Newbies can use free historical trading data from Yahoo Finance.

Traders need programming skills when they set up algorithmic trading systems. Generally, the most used language is C++. This is because it offers fast execution and high trading frequency. Also, some developers use Python and R to examine trading strategies.

When should we use Quantitative trading?

Quantitative trading can be used when the market opportunity is the same over a long period of time.

Why should we use Quantitative trading?

We use quantitative trading to:

  • Analyze data quickly
  • Analyze market throughout
  • Get rid of emotional decision making
  • Analyze and collect a large amount of data
  • Analyze texts and images 

What are the key components of Quantitative trading?

Quantitative trading has 4 key components. This include:

1. Strategy

Quant traders have to find a strategy to follow prior to creating a model. After researching the strategy, mathematical formulas are used to lower risks and increase returns. Moreover, a trader will choose how often the model will trade. Low-frequency systems determine long-term opportunities while high-frequency ones open and close several positions daily.

2. Backtesting

Backtesting is a vital process in developing a quant strategy.  It involves using historical data to check how the strategy performs in the real market. New traders can use free historical trading data by Yahoo Finance while experienced ones can pay for advanced data.  Backtesting can still fail due to market volatility and inaccurate historical data. Therefore, a trader has to get a full picture of the strategy.

3. Execution

Each system has fully automated execution and manual. An automated model doesn’t need human input since it uses an API to open and close opportunities. On the other hand, a manual requires a trader to reach out to a broker who places trades.

4. Risk management

Like any other form of trade, quant trading needs risk management. One area of risk management includes a capital allocation for every trade.

ZB is one of the world’s largest trading platforms. It offers quantitative trading to users. The platform has launched a quantitative trading bot that supports grid strategies like a classic grid, forward grid, and reverse grid. 

The trading bot helps users to:

  • Avoid mood swings and be a logic trader.
  • Find 7 by 24 automatic trading.
  • Support quantitative strategies like term arbitrage and grid trading.

To get started, visit the official website: Trade-Trading Bot 

You may also like: The Secrets of Trend Trading

Image source: Depositphotos.com

Filed Under: Finance Tagged With: finance, investment, investors, Trading

  • Facebook
  • Instagram
  • LinkedIn
  • Pinterest
  • Twitter
  • YouTube

Disclosure

We earn commissions if you shop through the links on this page.

Recent Posts

  • Top Trends in Milestone Party Themes for 2025
  • Top Causes of Elevator Malfunctions – And How to Prevent Them
  • kyron.bio raises €5.5M to use glycan engineering for advanced drug design
  • Velocity emerges from stealth with $10M to power the velocity of money
  • How to Incorporate Your Company Logo into Custom Workwear Without Compromising Style

Categories

Archives

Tags

Accounting bitcoin brand business growth business skills business success communication cryptocurrency Customer Service Data design Digital marketing ecommerce Efficiency employees Featured Article finance finances Health and Safety infographic insurance Investing investment legal legal services legal tips Management Marketing marketing strategy Outsourcing productivity property Real estate sales security SEO Social Media software starting a business startup Technology Trading Training website workplace

Innovation in Business MarTech Awards – Best SME Business Support Platform 2024 – UK

Innovation in Business MarTech Awards 2024 UK

CorporateLivewire: Innovation & Excellence Awards – Business Publication of the Year

CorporateLivewire: Innovation & Excellence Awards - Business Publication of the Year

Disclosure

We earn commissions if you shop through the links on this page.

Digital Marketing Agency

ReachMore Banner

Business Partner Magazine

Business Partner Magazine provides business tips for small business owners (SME). We are your business partner helping you on your road to business success.

Have a look around the site to discover a wealth of business-focused content.

Here’s to your business success!

Copyright © 2025 - Business Partner Magazine·