In life and in business, there are two types of data that you can work with: facts and opinions. Financial trading, however, is a business in which facts and opinions collide, sometimes leading to great success and sometimes clashing hard. It seems as if pitting two opposite worlds together to create a market would be a risky idea, but those in the trading market are experts in risk and see the benefits of these vastly different ideals working as one. By taking that risk and using rising technology to evolve it into a skilled trade, Quantitative Trading was created, forever changing the trading profession.
The early 2000’s brought a giant wave of technological advances, and as coding became more and more important, mathematicians began taking a step to the forefront of businesses instead of only supporting businesses behind the scenes. Trade experts have seen the important role that mathematical experts provide. Not only is the entire industry rooted in algorithmic strategy – a mathematical skill necessary for success in the market – new computer programs are being created upon complicated series of codes that will allow trade experts to do their job more efficiently and faster than what a human can accomplish. These programs are monitored and designed by mathematicians trained to deal in absolute data.
Mathematicians have dynamically altered the way experts handle trading algorithms. Because of the coding and algorithmic properties introduced within these trading software programs, trading experts are able to let the computer programs do the tedious and complicated work of gathering data, processing and predicting trends. This enables the trade industry to trade at the best possible moment, providing the best possible results for a trade with the best price and with the best outcomes, automatically. These programs eliminate the majority of risk with human error and allows the experts within the industry to focus on higher level strategy.
It might seem as if mathematicians and coding experts have it all figured out, eliminating the need for professional trade executives without a background in mathematics, however, there is still an element of supply and demand that reaches beyond mathematical data. This area of collision between human-driven wants and needs and absolute data is where Quantitative marketing lives, as the BBC pointed out in an article of the same nature. Quantitative experts are skilled in both how emotional decisions dictate the market and how data dictates what can be traded. You need to perfect strategies within this combination of skillsets to become a Quantitative expert.
As machine learning develops within the market as well, it will be interesting to see where quantitative trading expands to. For more on machine learning in the trading industry, read my latest blog, accessible here. For now, computer codes, mathematics, and expert trade leaders will be working together to capitalize on trends in the hopes of becoming the most successful they can possibly be.