World’s Best Quantitative Trading Systems – Part II
We already did a section “Borrowing a Page from the World’s Best Quant Investing Traders –Part I”. It introduced 4 traders who have justified quantitative trading and proved that it truly works. It also included snippets of investment advice and tips. A sequel to the previous section, brings into the spotlight quant traders who have profited handsomely using this method. You can also learn a few top traders’ secrets in the latter half of the article. So, keep reading.
Quantitative Trading – Richest Technical Analysts
- James Simons – His expertise at mathematics and trading has earned him the moniker “The Quant King”. He has a net worth of $10.6 billion. Simons’ Renaissance Technologies a private quantitative hedge fund investment company analyzes and trades securities using complex computer models.
- Ray Dalio – Ray Dalio has been dabbling in the money market since the age of 12. He established Bridgewater Associates in 1975 which is today the world’s biggest hedge fund. It has nearly $130 billion in assets. Dalio, throughout his career as a trader-investor, has relied heavily on understanding those processes that dictate the working of financial markets.
- Steven Cohen – A popular figure on Wall Street, he is an American hedge fund manager and founder of SAC Capital Advisers. With an estimated net worth of $9.3 billion, he was ranked as the 106th richest man in the world by Forbes.
- Paul Tudor Jones II – Paul Tudor Jones is a quantitative systems trader and founder of Tudor Investment Corporation. A graduate in economics from the University of Virginia, he started trading in cotton futures. He was voted the 108th richest American by Forbes.
Quant Trading Aspects Used by Successful Market Technicians
While a few traders are generous enough to share their money-making strategies with others, many others are not very keen on disclosing their secrets. Nonetheless, we’ve tried to dig in and learn of those strategies that have taken trader accounts from thousands to millions. Top technical analysts believe in:
- Working with a well-defined system
- Backtesting ideas before they are implemented
- Sticking with the decided strategies
- Opting for a quantitative trading system that suits their personality
- Seeking advice and guidance from experts in the field
Investment strategies, although they are the central element, are not the heart and soul of trading. A trader or investor’s personality also determines the profitability of securities. Hence, working on a few important personality traits can enable one to make wise decisions in a volatile market.
The first involves being decisive and disciplined. Being decisive refers to the human ability to make the right decisions at the right time without need for a second thought while being disciplined advocates sticking to the decided rules for the quantitative trading system. One should adopt a self-controlled and conscientious approach. Emotional reactivity is a personality trait almost every trader needs to work on. Most often wrong investment decisions are those that are emotionally driven. A trader needs to stay calm when opening and closing positions in the market and analyzing trends and patterns.
Top technical analysts advise traders to show low emotional reactivity and to be decisive, disciplined, confident and detached.
Best Quantitative Trading System Conclusion
As we round up this short section on the nitty-gritty of quantitative trading, we advise you do some personal reading on the topic. This will help you decide which quant trading strategy gels well with your investment philosophy. Technical analysis works, but to make it work for you, you must first create a system that suits your personality and investment requirements.