Quantitative trading is different from perceptual trading in quantitative analysis.
Programmatic trading is to use a computer to compile quantifiable analysis methods into trading strategies and automatically place orders. Programmatic trading is a part of quantitative trading, or a further upgrade of some quantitative trading. The standard to distinguish between programmed trading and quantitative trading is manual ordering or computer program automatically entrusting ordering.
On 20 15, 1519, the CSRC promulgated the Measures for the Administration of Programmed Trading in the Securities and Futures Market (Draft for Comment), which intends to establish a supervision system from six aspects: declaration verification management, access management, instruction review, fee management, strict regulation of the use of overseas servers, and supervision and law enforcement.
The exposure draft makes it clear that programmatic trading refers to the trading behavior of automatically generating or executing trading instructions through established procedures or specific software. Programmatic traders can only use one account for programmatic trading, unless otherwise stipulated by the China Securities Regulatory Commission.
Advantages and disadvantages of programmed trading
superiority
First, the application of programmed trading can overcome the weakness of human nature in the trading process, which is the biggest advantage of programmed trading and the main reason why I love programmed trading. Everyone has human weakness. Emotional factors, such as greed, fear, indecision and gambling, will make a person suddenly change his original plan at the moment of trading. This behavior is repeated, just as Schopenhauer, a German philosopher and psychologist, said. As an old futures trader who has been trading for many years, I have a very profound experience. Instead of trading with the market, we are the most typical people who constantly struggle with their demons and have a deep understanding of the futures market. That's the author of Memoirs of the Stock Market. Procedural affairs are all homework done in advance, and computers are out-and-out executors. It should be said that the integration of knowledge and practice is almost 100%. This also frees people from the hard work of the disk. For many years, we have faced the disk every day, and our hearts have been involved in the ups and downs of the market every day. In fact, my idea for many years is to make a happy futures model, make money easily and live a happy life. Because I paid too much for futures in the early stage, I should have a return, so I hope that programmed trading can give me a new breakthrough.
Second, the use of programmed transactions can break through people's physiological limits. As we all know, people's reaction speed is limited. It takes some time for us to trade manually from the brain, and computer program trading is obviously much faster than manual trading. Especially when we do multi-variety combinations to spread risks, people's ability is limited. If we choose more varieties, the transaction risk can be reduced. If we want to hold more than four products at the same time, when the market is fierce and many products are traded at the same time, that person's behavior cannot be taken into account, but computers can. Programmatic trading can keep you away from futures and enjoy life.
disadvantaged
First, only system traders can do programmed transactions, and other types of transactions cannot be completed through programmed transactions, which keeps some people out.
Second, the instability of programmed trading: I don't think the programmed trading system can win the world forever, and there will always be some problems at some point. Some people overestimate the effect of programmed trading, which makes it magical, but others reject programmed trading and question its function. They think it's a bit ridiculous to make money by programmed trading, so they kill them with a stick. In fact, this is inappropriate and has nothing to do with the nature of programmatic trading. We should treat the tool of programmed trading correctly, and how to do it well depends on how you make good use of this tool. Programmatic trading is designed by people. Of course, the ability of programmed trading system to make money will directly reflect the futures level of designers. The design idea is essentially an accumulation and precipitation of trading ideas, trading ideas, trading methods and even trading experience, but we can't guarantee that one method will always be applicable to futures. The designer behind the programmed trading system can't do it once and for all. He must face this market, keep learning, make progress and seize opportunities.
Third, the procedural trading technology has a high threshold and cannot be popularized. Some well-known domestic software platforms still can't fully reflect traders' execution ideas, and the software industry is more and more developed, but it is still not omnipotent and always flawed. Programming is a deep technology, many people can't, and it's not that easy to learn. Some people flinch, but even experienced software engineers can't reflect the trading ideas of all system traders at will. The system that can really make money in the long run may be.