Does Quant Trading Work? Is Being A Quant Worth It? (Strategies and Insights with Video Analysis)

Does quant trading work, and if so, how can you make quant trading work for you? Quant trading (quantitative trading) might sound complicated, but don’t let the terms scare you away from trying or digging deeper. Quant trading can be very profitable if done correctly.

Quant trading does work. We believe quant trading is the correct way to approach short-term trading. Even better, we believe it potentially can work for anyone who is a keen learner – you certainly don’t need a Ph.D. to be a quant. Through backtesting, you can develop trading strategies and have a fair chance of making money.  We provide a 5 step plan to make quant trading work for you.

We believe quant trading offers better chances of profits than discretionary trading. How much you make depends on your work ethic, discipline, and creativity.

Why do we believe quant trading can work for you?

Because quant trading has rules that are 100% quantified and testable. As long as you stick to the rules and signals, you’ll be fine.

Many hedge funds and mutual funds are successful at quant trading. But many aspiring traders are wondering if you as a small, independent, and private trader can succeed in quant trading.

We believe you can succeed in quant trading just as likely as any professional institution. We have been trading full-time for 20 years, purely by quantified buy and sell signals. We have hardly done a discretionary trade since the 1990s! If we can do it reasonably well (we are not particularly smart nor intelligent), anyone can. But it for sure requires a lot of work and discipline.

Why does quant trading work?

Discretionary trading is difficult. The number of indicators, news, bells, and whistles is endless. What are you going to base your buy and sell decisions on? You risk going around in circles looking for the Holy Grail.

Opposite, quant trading helps you define your signals to a few clearly defined rules. You download or buy market data of historical quotes, and start looking for patterns, effects, and anomalies. The trading strategies can be based on seasonalities, mean reversion, trends, price action in different markets, etc.

The good news is that trading strategies don’t need to be complex. Quite the contrary, the simpler you make them, the better.

Once you have backtested the rules and checked its profitability, you paper trade before you go ahead and trade it with real money. Pretty simple, at least in theory, but most traders have a tendency to overcomplicate things.

To help you get started we suggest you approach quant trading in this order:

8 simple examples of quant trading strategies – video

5 steps to make quant trading work for you

Victor Niederhoffer explained in Practical Speculation how you can use the scientific method to y