---The Application and Development of Quantitative Trading
On May 11, 2021, Dr. Zhang Tao, the head of the research and quantitative trading department of Shanghai Yijin Network Technology Co., Ltd., was invited to our institute to give a lecture on the industry forum with the theme of "Application and Development of Quantitative Trading". Dr. Zhang Tao previously served as Vice President of Nomura Holdings, New York, responsible for quantitative strategy development and research. Having over 10 years of experience in the field of quantitative research both domestically and internationally, I joined Shanghai Yijin Network Technology Co., Ltd. after returning to China and was responsible for the development, research, and execution of quantitative trading strategies. The company's quantitative trading team focuses on high-frequency algorithmic trading based on data and machine learning models, and is highly influential in both traditional finance and blockchain industries.
In this forum lecture, Dr. Zhang Tao introduced the development process and current situation of the quantitative trading industry at home and abroad, as well as the needs and challenges for practitioners in this industry. At the same time, Dr. Zhang combines his academic research on trading and work experience on Wall Street to introduce the knowledge, skills, and applications required for developing quantitative trading strategies, and further analyze the development direction and career prospects of the quantitative trading industry.
Firstly, Dr. Zhang Tao introduced the difference between quantitative investment and artificial investment. It is pointed out that quantitative trading is different from human investment in that it uses advanced mathematical models to replace subjective judgments. By using computer technology to select various "high probability" events from a large amount of historical data that can bring excess returns, strategies can be formulated to greatly reduce the impact of investor sentiment fluctuations and avoid making irrational investment decisions in the extremely fanatical or pessimistic market. Dr. Zhang, based on his work experience at home and abroad, explained that there are still many employment and development opportunities in the domestic quantitative trading industry.
Next, Dr. Zhang compared Quant Trading and Fundamental Trading for us, describing the differences in their daily work between Quant Trader and Fundamental Trader. Quant Trader mainly requires conducting research, developing strategies, building models, and utilizing computer results to assist in trading; Fundamental Trader mainly assists trading by studying market trends and fundamentals.
Afterwards, Dr. Zhang introduced us to the current situation of the quantitative trading industry at home and abroad, and also introduced us to three well-known quantitative funds at home and abroad. They are Renaissance Technologies founded by James Simons, Citadel, and D.E. Shaw&Co founded by David E. Shaw. By watching a video, it further introduced us to the points that need to be paid attention to when doing trading as a good quantitative trader.
Dr. Zhang mentioned that the role of statistics in quantitative trading is to draw on history to predict the future. When observing or understanding the market, there are often some biases. As students majoring in applied statistics, we can use statistical methods to observe data and quantify the probability of events that we are concerned about.
Dr. Zhang pointed out that the current quantitative trading industry has unlimited opportunities and prospects. Dr. Zhang, based on his research and work experience, provides some sincere advice to students who are interested in pursuing a career in the quantitative trading industry in the future. If you want to be an excellent quantitative trader, you need solid mathematical and statistical skills, modeling and programming abilities, as well as background knowledge in finance and economics. Read as much news as possible, understand what is happening in the world, and obtain various information.
In the final questioning session, the students also actively asked questions, and Dr. Zhang Tao provided very detailed answers to issues such as employment, knowledge reserves, and personal development. Through this lecture, the students gained a lot and gained more understanding and knowledge about quantitative trading in the industry.
Contributors: Guo Weilun, Liu Yupei
Image provided by: Cheng Yue
