Quantitative Strategies

The phases of integration or development from scratch of quantitative strategies. The basis of a strategy and therefore of a quantitative system must arise from the trader’s evaluation of a specific behavior of one or more financial instruments during a specific trading period. So, this trading idea will be the basis on which to work to implement or develop the strategy on one or more financial instruments. The idea must be filtered and validated through some logical parameters that immediately allow us to understand if it is effective and not random in the results.

The first back testing of the raw strategy is practiced on 8-12 year data without any type of optimization using specific software with historical data and without any filter. If the raw result of the test is already good and stable, we move on to the subsequent phases.

Positive results are analyzed and verified with a series of effective parameters at an initial risk analysis, especially in relation to profit stability and drawdown periods. If the parameters respect the relative coefficients, we will proceed to the subsequent implementation phases.

Here we proceed with the analysis of the strategy with respect to the execution of limit or stop orders; the prevalence of stop or limit orders substantially differentiates the strategy which will therefore be analyzed from the perspective of the sustainability of trading operations.

In this phase, all studies deriving from quantum analysis that are well harmonized with each other are included in the strategy to avoid conflicts in the data.

In this step, some of our proprietary techniques are applied in back testing for the closure of profit transactions and for the STOP LOSS exit with specific use of the AC STOP (rights reserved).

In this phase, all studies deriving from quantum analysis that are well harmonized with each other are included in the strategy to avoid conflicts in the data.

In this step, some of our proprietary techniques are applied in back testing for the closure of profit transactions and for the STOP LOSS exit with specific use of the AC STOP (rights reserved).

In this second back testing, a new check of the results of the strategy is carried out at the same time as the risk calculation. Only if satisfactory will we proceed to the next phase.

The results are verified again by verifying the effectiveness of the strategy in all market phases with respect to volatility. This third and final back testing will be the definitive one to verify the effectiveness of the strategy.

In this phase, proprietary stress tests are carried out which define the results of the back-testing with great certainty. The performance resulting from the back-testing will be very close to that of the real market and will consequently allow a final and concrete analysis of the risk calculation and frequency of trading operations.

The strategy for the automatic passage of orders on the relevant platform will be codified. The coding process will have to consider the trading platform chosen by the trader which in some cases differentiates the execution process and therefore the results.

Legal Note

Quantal is a professional organization that offers institutional, para-institutional, and professional investors in general IT, technological and artificial intelligence support for the study, analysis and programming of quantitative and algorithmic trading and the structuring of complex financial products. It does not carry out and is not authorized to carry out any asset management or other similar activity, for which specific authorizations from the financial authorities are required. N.B.: when we talk about programming and related coding of orders on trading platforms, it is understood and specified as referring to an IT activity on behalf of third parties and nothing else.