Quantitative trading or quant trading is a trading style based upon quantitative analysis. Quantitative analysis in trading relies on mathematical modelling and computer algorithms to identify trading opportunities. An asset’s variables such as its price or trading volume are some of the inputs regularly used for mathematical modelling.
There has been a recent surge of individual investors adopting quantitative trading strategies. Traditionally, quantitative trading strategies were predominantly used by either financial institutions or hedge funds. When these large enterprises utilise quant trading as a strategy, thousands of stocks or other instruments are often bought or sold, usually amounting to hundreds of thousands in value of transactions.
Quant trading is a trading style that is increasingly becoming adopted by individual traders. Read on to discover what quant trading is, how it works and how to get started. We will cover examples of quantitative trading and many popular quantitative strategies.