Trading as Quants

In this short article, we will explain to you what is Quantitative Analysis and some advantages of using QuantDS Trading Guides aside from Technical Analysis and Fundamental Analysis.

Definitions

First, lets' define Quantitative.

According to Merriam-Webster.com, 'Quantitative is relating to how much there is of something, relating to the quantity or amount of something, expressible in terms of quantity, or relating to or involving the measurement of quantity or amount.' It simply means Quantitative is relating to, measuring, or measured by the quantity of something rather than its quality.

Quant

What is Quantitative Analysis?

Quantitative Analysis is a type of business analysis that uses mathematical equations and statistical modeling to predict future behavior or events and represents the results in terms of numerical value. The primary advantage of quantitative analysis is that it involves studying precise, definitive values that can easily be compared with each otherAnd in the financial world, a person who rely strictly or who uses quantitative analysis on financial and risk management are referred to as Quants.

So if you are using QuantDS Trading Guides (which are all based on Quantitative Analysis), you can call yourself a Quant. 🙂

Before, quantitative trading is generally used by hedge funds and financial institutions that transact large scale of shares and other securities. However, quantitative trading is becoming more commonly used by individual investors today.

Using QuantDS in Trading

Stock market technicians and fundamentalists use technical and fundamental analysis as a tool for assessing the strengths, weaknesses, opportunities, and threats of the company or position based on the criteria defined by the indicators. Aside from the two analysis mentioned above, quantitative analysis is also being used by some programmer and math geeks in trading.

In this era of big data, quantitative analysis is being used to identify the strategy,  to remove biases, to manage risk, and to save time. Some other countries, particularly in the US, they interface it to the brokerage to automatically execute the buying and the selling based on criteria and condition. Unfortunately, the Philippines Stock Exchange doesn't have yet that technology in trading. But the good thing is, we have a semi-automatic quantitative guide available in our country - the QuantDS Trading Guides (QuantDS PSE for PSE trading and QuantDS FX for forex trading). Semi-automatic means automatic scanning and filtering but manually execution of buying and selling.

QuantDS is considered as quantitative in nature, it is semi-automatic because we still have no interface available in the PSE as of this writing to execute trades automatically. Thus, the users, or the quants, order the buying and the selling manually.

Advantages of Using QuantDS Trading Guides

These are the main advantages of using Quantitative Analysis (via QuantDS) aside from Technical and Fundamental Analysis:

  • It simplifies the analysis of trend and momentum by providing a comprehensive data sheet. A trend, momentum, and reversal strategies attempt to exploit both investor psychology and big fund structure by hitching a ride on a market trend, which can gather momentum in one direction, and follow the trend until it reverses. A reversal strategy is one that attempts to exploit the fact that a long-term mean on a 'price series' (such as the spread between two correlated assets) exists and that short-term deviations from this mean will eventually revert.
  • Mapping the stock’s status based on closing price; suggested entry, exit and cut loss; risk vs. reward; and value traded.
  • Simplified, a real-time approach to the end-of-day data, accurate results, effective collaboration of all tools used in technical analysis, instant trading plan, analytics-based decision making, and elimination of biases.

QuantDS - Proud First. Proven Effective. Accurate Results.

~ by Michelle S. Soriano (Founder, QuantDS)

For those who want to use the QuantDS Trading Guides, simply click the subscribe button anywhere here on our website and follow the instructions.


References:

  • image: news.efinancialcareers.com
  • thumbnail: www.idnworld.com
  • https://en.wikipedia.org
  • http://www.merriam-webster.com/

 

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