1, intraday high-frequency trading
Intra-day high-frequency trading, as the name implies, means frequent T+0 trading in the day. As long as the profit of each operation is higher than the handling fee, the position will be closed. There is not much profit and loss per transaction, but the number of transactions per day may be very frequent, reaching hundreds of times, and the cumulative expected annualized expected income will be very considerable. At the same time, the risk is very low because of the limited loss each time. Take soybean futures as an example. The unilateral handling fee is calculated according to 6 yuan, and there is no charge for closing positions within the day. If the price fluctuation 1 point is 10 yuan, then as long as the price rises 1 point, the profit can be closed, and the corresponding decline 1 point also needs immediate stop loss.
The advantage of intraday high-frequency trading is low risk and stable profit, but the disadvantage is that the handling fee is too high due to day trading.
2. Trend trading
Trend trading can be divided into intraday short-term trend trading and overnight long-term trend trading according to the trading cycle. We mainly introduce overnight trend trading. Trend trading is generally judged by technical analysis, such as moving average system and various technical indicators.
When judging by technical analysis, it often happens that an index has a very good effect on a specific variety, but it has an average effect on other varieties, and even leads to losses because it is not suitable. Therefore, for different varieties, or different periods of the same variety, it may be necessary to use different models or adjust the parameters of the models to obtain ideal benefits.
3. Arbitrage trading
Arbitrage trading is a low-risk, expected annualized expected return, and it is also one of the most widely used programmatic trading strategies. A large number of foreign hedge funds take arbitrage as the main trading method. There are many kinds of arbitrage transactions, such as cash arbitrage, intertemporal arbitrage, cross-species arbitrage and alpha arbitrage.
According to different types of transactions, the risk of arbitrage is also different. Focusing on arbitrage, it belongs to index arbitrage. When the price difference between futures and spot index is too large, positions will be established to earn expected annualized expected returns without risk. Other arbitrage methods are non-index arbitrage, and there are certain uncertainties in the spread trend of two or more varieties, so there are certain risks. According to NYSE statistics, among all programmed transactions, only one transaction is index arbitrage, and the others are non-index arbitrage.
4. Combination strategy
The combination strategy of programmed trading is to operate the portfolio. When the amount of funds is huge, it is necessary to reduce the unsystematic risk by diversifying investment, that is, managing the portfolio. For example, buy a basket of stock portfolios, or use multiple trading strategies in the portfolio.
Programmatic trading can help investors to carefully manage and analyze each trading variety or strategy in the portfolio, thus reducing trading risks and improving management efficiency.
5. Other strategies
In addition to the four strategies mentioned above, there are also hedging strategies, such as using warrants to hedge stock risks. After the small contracts and options of stock index futures are listed, the trading strategies will be more abundant. I won't introduce them here.