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Thursday, June 11, 2009

Quantitative Methods

Why Quant in Trading?

Some of the most successful hedge fund managers today are run by quants. A good example will be Jim Simons of Renaissance Technologies. He spent 17 years in the academia before setting up 'RenTec' as Renaissance Technologies is commonly known [1]. 'RenTec' manages assets in excess of US$20 billion and its flagship Medallion Fund was up 58% for the first nine months of 2008 [2]. Other successful quant funds of note include D.E Shaw, Goldman Alpha Fund. While a significant number of hedge funds took a major beating in 2008, I believe that the growth and subsequent dominance of 'quant' funds in the last 20 years provide many learning points for other traders.

This page is a running list of articles I wrote on quantitative stuff. It is designed for beginners who want to learn bit by bit and slowly develop their strategy along the way. My objective is to share information and knowledge for those who are willing to spend time learning and reading.

A quick note on what you need to get started.

A quick note on where such knowledge is being applied.

Some introductory concepts towards multivariate distributions

Needed to compute Bessel functions of fractional orders which are in turned used in evaluating the probability distribution functions of the Generalized Hyperbolic distribution

Some analysis of what exactly are technical indicators

A basic look at high-band pass filters and low-band pass filters


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The objective of Finance4Traders is to help traders get started by bringing them unbiased research and ideas. Since late 2005, I have been developing trading strategies on a personal basis. Not all of these models are suitable for me, but other investors or traders might find them useful. After all, people have different investment/trading goals and habits. Thus, Finance4Traders becomes a convenient platform to disseminate my work...(Read more about Finance4Traders)


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