Did you ever write the code for an application? Are you familiar with the for loop in computer programming? The loop is always required to run an iterative process many times. The quantitative trading system also works in the same way, runs under a loop, and after completing each cycle, counts, adds, and subtracts the assets and their related variables. This tutorial is designed to provide the fundamental knowledge of quantitative trading system.
What is strategy?
If you grasp the fundamental concept that a quantitative trading system is just like a loop in the computer program, then strategy is the main function that is called after each cycle of the loop.
Most of the open-source frameworks provide you with a strategy function that can be edited according to your directions. An actual quantitative trading system traverses K-line data. The for loop runs with a real-time data acquisition process and start strategy function, which behaves according to guidelines. For example, buying assets after some period of time, etc.
The real system is much more complicated, but the basic logic is similar. The buy and sell functions are calculated based on the historical K-line. As a trader, you are only executing functions and scheduled tasks.
High-frequency trading
If your system, daily review the data reports, and decide the day’s operation and trading plan. It is a high-frequency trading system. The original system has more power and complications, but the real concept is the same.
Powerful internet and hardware
If you are interested in high-frequency and quantitative trading, the power of hardware and the internet has so much importance. Because you are competing with other traders who have excellent hardware and communications speed.
Summary
- Quantitative or high-frequency trading is all about automation and speed.
- You always need historical data; otherwise, you can’t guess it.
- You must process the data into indicators and then handle it over to the system.
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