Is quantitative trading good or bad?
superiority
The investment performance of 1 is stable: because the quantitative trading performance is usually formed by the accumulation of profits generated by many high probability events, it can only enter people if it meets its requirements, thus greatly improving the success rate. Although there is no guarantee that you can make money once, you can be sure that you can make money for a long time. In other words, it wins by probability. This is mainly manifested in two aspects: first, quantitative trading constantly digs out historical laws that are expected to be repeated in the future from historical data and uses them. The second is to win by a group of stocks, not by one or several stocks. From the concept of portfolio, it is to capture stocks with high probability of winning. Instead of just betting on one stock.
2. Realizing rational investment: It helps you to remain rational when it is easy to lose your rationality, so when the market overreacts and loses its rationality, quantitative investment can overcome the weakness of human nature and seize the opportunity in time.
3. Strong information processing ability: personal transactions wander in the securities market, but they are bound to be very confused about all kinds of information in the market, and the information processing ability of quantitative transactions is stronger. When we look at the stock market, we think it is like the sea. In the vast sea, you need a guide if you want to get a constant return. And this guide is our trading model, just like GPS when sailing in the vast securities market.
disadvantaged
First, the "price difference" crisis in the primary and secondary markets, then the crisis of traders' operation and finally the crisis of system software.
The "grade difference" in the primary and secondary markets is the core of the whole arbitrage transaction. Under the existing rules, ETF arbitrage models can be divided into two types: one is to buy a basket of stocks, exchange the corresponding ETF shares in the primary market according to the exchange ratio, and then sell ETFs in the secondary market; The other, on the contrary, is to buy ETF shares in the secondary market, exchange them for corresponding shares through the share exchange ratio, and then sell them in the secondary market. The trading order depends on the changes of stock price, turnover rate and ETF share trading price.
Due to the change of stock price, ETF arbitrage spread is fleeting, so the complicated calculation process is currently completed by computers in the industry. Traders set up calculation programs and decide strategies according to the results, or automatically let the system trade automatically when arbitrage space appears. The latter is called programmatic trading.
Because the arbitrage space is very small, usually only a few ten thousandths, and the amount of funds involved in arbitrage trading is relatively large, in order to obtain moderate returns. If traders make the wrong order, they will lose money, which is the differentiation crisis. In order to control this man-made crisis, brokers generally advocate automatic trading, the direction is controlled by computer, and traders can input the number of transactions.
The second crisis is the operator's error, such as the Oolong Finger Incident of Everbright, which may be that the traders made a mistake when inputting the quantity. This also involves the third crisis, the system software crisis. Each trader has corresponding trading rights in the system, including quantity and amount. The amount involved in Everbright was once rumored to be 7 billion yuan. How did such a huge amount bypass the system authority to complete the transaction? The exposure of this issue has also made the industry question that Everbright's risk control has not been done enough.
In fact, any investment method has advantages and disadvantages. You can't simply judge whether it is good or bad. The above are some advantages and disadvantages about it. Whether it is good or bad depends mainly on our current actual situation and application.