What is Quantitative Trading?
Simply put, quantitative trading uses mathematical and statistical methods and relies on computer programs to make trading decisions.
Unlike traditional investing, it doesn’t depend on a person’s subjective judgment. Instead, it uses data and model calculations to automatically generate buy and sell signals.
Plainly speaking: quantitative trading is like pre-writing a “money-making recipe,” letting the system automatically monitor the market and execute trades—no emotions, no shaking hands. (For example, when it drops you don’t panic-sell, and when it rises you don’t get greedy and refuse to sell.)
A quick example 🌰 so you get it immediately: Suppose you run a fruit shop. In the past, every day you decided how much to stock based on experience and guessing (if apples sell well today, you stock more). Later, you find a “stocking assistant” mini program. It analyzes the weather, historical sales, and how competitive the neighboring stores are, and then tells you how many apples and bananas you should stock today.
For example, it finds that whenever it rains, banana sales drop by 20%, while apple sales rise by 15%. So the next time the forecast says it will rain, this “assistant” will promptly remind you to stock fewer bananas and more apples.
Simply put, quantitative trading uses mathematical and statistical methods and relies on computer programs to make trading decisions.
Unlike traditional investing, it doesn’t depend on a person’s subjective judgment. Instead, it uses data and model calculations to automatically generate buy and sell signals.
Plainly speaking: quantitative trading is like pre-writing a “money-making recipe,” letting the system automatically monitor the market and execute trades—no emotions, no shaking hands. (For example, when it drops you don’t panic-sell, and when it rises you don’t get greedy and refuse to sell.)
A quick example 🌰 so you get it immediately: Suppose you run a fruit shop. In the past, every day you decided how much to stock based on experience and guessing (if apples sell well today, you stock more). Later, you find a “stocking assistant” mini program. It analyzes the weather, historical sales, and how competitive the neighboring stores are, and then tells you how many apples and bananas you should stock today.
For example, it finds that whenever it rains, banana sales drop by 20%, while apple sales rise by 15%. So the next time the forecast says it will rain, this “assistant” will promptly remind you to stock fewer bananas and more apples.