Quantitative analysis is just the data version of the charts so really one and the same...except on the chart all the work is done for you.
technical analysis
- Thread starter eleanorK80
- Start date
Quantitative analysis is just the data version of the charts so really one and the same...except on the chart all the work is done for you.
I will explain a profitable trade not using TA that many hedge funds use. Let's say company A wants to buy company B at $ 57. Company B stock will go up to $ 55 since there is still risk the trade will not close. Hedge funds will short Company A stock and buy the same amount of Company B stock locking in spread till the deal closes. I would normally just buy company B stock if I thought the deal was going to go through and maybe sell call options on company B stock. Risk of trade is of course if the deal does not close the hedge funds lose money.
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- There are three ways to make a living in this business: be first, be smarter, or cheat."
There is a fourth way: I would rather be lucky than be good.
In your example, there are always a few lucky retails stumbled into B stocks prior to the buyout announcement.
Technically that is technical analysis...when company A announces buying company B, their stock typically drops in price because stock holders get nervous about the acquisition and how financing it will affect the performance (short term) of company A...and as we know a company is only as good as it's last quarter according to 99% of investors..So the hedge funds noticed this phenomenon and started to try to capitalize on it
Please explain the difference.
I'm guessing technicals are levels, S/R, round numbers, bars, charts, algos number crunching......
I'm guessing TA is the interpretation of lines and indicators, head & shoulders, cup & handle stuff, wedges, RSI, MA's, OBV etc etc, a kind of reading of the tea leafs.
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Technicals are just the raw data. Tick data, volume, range, DOM/displayed liquidity, etc. I would also add: short interest, borrow rate, and option data. Pretty much everything you get from an exchange.
No need for charts, better to be precise and measure on python or excel. With the data you can measure things like: correlations, volatility, returns, trends, etc. and conduct timeseries and cross-sectional analysis.