Algorithmic Strategies

New ideas must respond to a selection of logical criteria: the chart analysis must support the trading idea and not generate it. The lack of these criteria would give the strategy random or too random results not worthy of consideration.

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 test result is already good and stable, you can move on to the next step.

The positive results are analyzed and verified with a series of parameters, carrying out an initial risk analysis especially on the stability of the profit and the drawdown periods. If the parameters meet our coefficients, it will be possible to proceed with the subsequent implementation phases.

Sometimes filters related to the « Time Arc Theory » are introduced (rights reserved). They will serve to immediately improve the results of the strategy that automatically incorporates the extraordinary contributions of this theory.

With the application of our statistical filters, the operations generated by the strategy are filtered, improving the percentage of profitable trades.

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).

The results are verified again by verifying the effectiveness of the strategy in all phases of the market 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 reliability. The performance resulting from the back testing will be very close to that of the real market and consequently will allow a final and concrete analysis of the risk calculation and frequency of trading operations.

In this phase, the possible dimensions of the quantities of money or lots to be traded will be established in relation to the objectives of return, maximum drawdown, and consequent risk management.

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.