Algo & Quant traders

[mbquant]

These are the same people who will tell you that "Past performance is no guarantee of future results" when talking about TA lol. All they do is backtest. What's up with that? Algos are more just a way to automate a losing strategy based on rigid rules. Quant trading is more flexible as its more about finding opportunities.

Algorithmic (algo) traders use automated systems that analyze chart patterns then open and close positions on their behalf. Quant traders use statistical methods to identify, but not necessarily execute, opportunities. While they overlap each other, these are two separate techniques that shouldn't be confused.

Quant trading employs a wide range of statistical and mathematical techniques to analyze data and develop predictive models. Technical analysis-based trading is more focused on identifying patterns and trends in price data.

Quant and TA sound like the same thing...I mean chart patterns essentially have all the quant math built in. Quant trading is like trying to find the recipe for a cake when you can just go buy the cake. Quant trading would make sense if charts didn't exist lol.

Not really.

You can be profitable only when you get to identify a certain 'edge' over the market, or be able to tap into some inefficiency or mispricing.

And it takes quant methods to identify, quantify, and act efficiently and quickly upon these.

You simply can't rely on some chart patterns for the same.

Moreover, to identify a statistical significance in some phenomenon, be it normality, or cointegration, or anything for that matter, you hve to rely on statistical tools and models.

I understand the myopic view on quant trading that many people have, simply because it's too much of work, but fact remains, since Jim Simons, many institutions have adopted quant, and are profitable as well, while using it.

 

[mbquant]

Good Morning themickey,

Thanks for the explanation. I know what it means now.

You guys and gals keep talking about all this quant and algos stuff, but yall not talking about the capital required to do this. Noone has +$200K to do it right.

My opinion is this:
1. Manual trading the ES and NQ markets makes more money than running an algo system or quant trading system in the long run and short term.
2. Guessing trading in the ES and NQ markets makes more money than running an algo system or quant trading system in the long run and short term.
3. Gambling trading in the ES and NQ markets makes more money than running an algo system or quant trading system in the long run and short term.

4. Systematic and quant trading takes too long to get right and the pain of drawdown.
5. From my understanding right now, for Systematic and quant trading to work need a lot of them running at one time. About +$200,000 of capital.

ES and NQ market manual trading cost is about $2000, and instant reward everyday.

Do you have any real data to back up your claims?

 

[wxytrader]

Not really.

You can be profitable only when you get to identify a certain 'edge' over the market, or be able to tap into some inefficiency or mispricing.

And it takes quant methods to identify, quantify, and act efficiently and quickly upon these.

You simply can't rely on some chart patterns for the same.

Moreover, to identify a statistical significance in some phenomenon, be it normality, or cointegration, or anything for that matter, you hve to rely on statistical tools and models.

I understand the myopic view on quant trading that many people have, simply because it's too much of work, but fact remains, since Jim Simons, many institutions have adopted quant, and are profitable as well, while using it.

As mentioned you guys are re-inventing the wheel.

The Fibonacci sequence. It’s been called “nature’s secret code,” and “nature’s universal rule.” Just take a look at the pattern it creates and you can instantly recognize how this sequence works in nature like an underlying universal grid. A perfect example of this is the nautilus shell, whose chambers adhere to the Fibonacci sequence’s logarithmic spiral almost perfectly. This famous pattern shows up everywhere in nature including flowers, pinecones, hurricanes, and even huge spiral galaxies in space.

https://blog.quantinsti.com/fibonac...nacci sequence,areas of support or resistance.

 

[semperfrosty]

As mentioned you guys are re-inventing the wheel.

The Fibonacci sequence. It’s been called “nature’s secret code,” and “nature’s universal rule.” Just take a look at the pattern it creates and you can instantly recognize how this sequence works in nature like an underlying universal grid. A perfect example of this is the nautilus shell, whose chambers adhere to the Fibonacci sequence’s logarithmic spiral almost perfectly. This famous pattern shows up everywhere in nature including flowers, pinecones, hurricanes, and even huge spiral galaxies in space.

https://blog.quantinsti.com/fibonacci-retracement-trading-strategy-python/#:~:text=Based on the Fibonacci sequence,areas of support or resistance.

With it being such a strict universal rule,when it blasts through a level(especially a 50%) is it assumed that the calculation was wrong eg that it was measured from the wrong spot in the first instance?

 

[SimpleMeLike]

Do you have any real data to back up your claims?

Good Morning mbquant,

No I do not. And neither do you.

 

[wxytrader]

With it being such a strict universal rule,when it blasts through a level(especially a 50%) is it assumed that the calculation was wrong eg that it was measured from the wrong spot in the first instance?

No not necessarily. If wave C = 161.8% of wave A, wave C can be a wave 3 of a 5 waves impulse. You will not know until the level is broken.

 

[2rosy]

here's a multiplier for your returns

import numpy as np

sigma=.2
r=.043
atmK=32.
d=45
magic = lambda N: N/2*sigma * np.log(N*r) * (( r**2* 1/r ) - (r**atmK * r**-(atmK-1))) * np.sqrt(d/360.)
magic(5_000_000)

 

[Sprout]

As mentioned you guys are re-inventing the wheel.

The Fibonacci sequence. It’s been called “nature’s secret code,” and “nature’s universal rule.” Just take a look at the pattern it creates and you can instantly recognize how this sequence works in nature like an underlying universal grid. A perfect example of this is the nautilus shell, whose chambers adhere to the Fibonacci sequence’s logarithmic spiral almost perfectly. This famous pattern shows up everywhere in nature including flowers, pinecones, hurricanes, and even huge spiral galaxies in space.

https://blog.quantinsti.com/fibonacci-retracement-trading-strategy-python/#:~:text=Based on the Fibonacci sequence,areas of support or resistance.

Since you promote fibs in all things, if you haven't already, you'd enjoy Christopher Alexander's "The Nature of Order" which catalogs many fibs in nature that aren't typically seen in contemporary media. Alternatively, if you enjoy the esoteric, "The 216 Letter Hidden Name of God" reveals some interesting patterns within the Fibonacci Sequence.

While many enjoy roasting you, how the modern world has classified Time is derived from Astronomy and it's predecessor Astrology. We can trace it to Sumerian culture and their Sexagesimal system (base 60). The historical study of Time is an interesting excursion and answers many "why's".

With it being such a strict universal rule,when it blasts through a level(especially a 50%) is it assumed that the calculation was wrong eg that it was measured from the wrong spot in the first instance?

Although it's frequently associated as a level, 50% isn't in the Fibonacci sequence