What is the most troublesome thing about quantitative trading?

[RubyYao]

Endless programming details, which is the barrier of prevent you from turning strategy thinking into to a real project.



Of course, basic programming knowledge reserves still have to be there, but the details of the bottom mechanism should not be a stumbling block to hold back your strategy as soon as possible to run.



The meaning of the term "Quants" is a very broad concept. Usually operated as a common team, everyone on this team can be called a “Quants”. In the team, someone is responsible for writing the program; someone is responsible for formulating the strategy; someone is responsible for the maintenance and backtesting of the actual running of the strategy; someone is responsible for the establishment of strategic mathematical models (especially algorithmic trading); and others are responsible for the study of market fundamentals.



As can be seen from the above, why the “Pros” are professional? because an effective division of labor can produce greater and better performance.



As an individual investor, how do you compete with these professional teams? After all, a person's ability is limited. Even if you are the same genius as Einstein, IQ can crush anyone in the above-mentioned team, but from the time perspective, I believe that it will still cost you a lot more times than an operation team.



As a trader, please think carefully about a problem. Each of member in the above teams has their own roles and is vital to the actual operation of the project. But what is the most important thing?



Strategy, Strategy, and Strategy!!! this is the core component of all so-called "quantitative trading" Everything in the team is a derivative of this factor. Assuming that "strong artificial intelligence" have been invented one day, the computer can understand human language without barriers, no longer need professional programmers, as a quantitative trader, what do you need to do? Strategy, still the strategy, traders only need to tell the computer the strategy process, the strong artificial intelligence computer will understand the human language, and then trade the strategy you developed.

[TonyC]

RubyYao asked:

> What is the most troublesome thing about quantitative trading?



I'd say the most troublesome thing is coming up with an idea, working on it for 2 months ...

... and then finding out FDAX did it better and faster 3 years ago, (and after trading it for 2 years), abandoned it because the edge is gone ... and that he has already moved on to the next thing

[RubyYao]

cruel

[RubyYao]

Automation on digital currency exchanges is the boring programming details mentioned earlier in this article, such as the interface interaction processing of major exchanges, the processing of the runway after you place an order. Most importantly, in order to verify the effectiveness of the strategy, the construct of the backtesting system.



If you want build a backtesting system yourself, you need to understand computer science, you need to learn the operating system (such as server-side LINUX as cloud computing), you need to understand programming languages such as C++ (especially for high-frequency trading), python (strategy writing, machine learning) ), R (scientific computing, machine learning), you need to understand the order trading mechanism at the bottom of each major exchange, you need to optimize your order runway to ensure that your order can be quickly executed.



All of the above, in the current world market environment, with one person's power, is almost an impossible task, especially for those who do not have any computer science foundation. And this may just be for a single exchange or market. For digital currencies, there are currently many exchanges, and the mechanism for processing orders at the bottom of each exchange is different, which further increases the learning curve.



You may have to spend years on the computer science knowledge mentioned above, during the studying period, you may not be able to implement any trading strategy from your mind. You will miss a lot of trading opportunities, especially for professional traders, who need to spend a lot of time on this knowledge so that they can't concentrate on trading, resulting in no income, which leads to psychological distortion of their trading life.

[RubyYao]

Is there a place to help you to do the quantitative research and automotive bottom mechanism construct?

[RubyYao]

Remember, you are a trader, not a programmer. Professional things are better left to professional people.

[Maggette]

I am predicting ,in this thread, pretty soon we will get an url to something that makes *buzzwords easily accessible for retail traders and will unleash the power of the retail trader to become a one man hedge fund.



* machine learning/ai, strategy development, risk management...

[RubyYao]

so you have better suggestion? little genius

[doomanx]

"As an individual investor, how do you compete with these professional teams"

Simple, just use the Reverse Kolmogorov-Smirnov test. It's pretty much the core idea used by Renaissance, Two-Sigma etc.

[RubyYao]

are u a professional user?