Blockchain 101 Episode 34 – What is Quantitative Trading?

Quantitative trading, sometimes known as algorithmic trading, utilizes advanced mathematic models instead of our subjective judgment. It removes human emotions, which eradicates making irrational investment decisions that often occurs during market mania or sell-off. There are various types of quantitative trading, such as arbitrage, trend trading and hedging, etc.

Arbitrage opportunity exists when there is a significant price gap in different exchanges, providing an opportunity to buy low in one exchange and immediately sell high in the other. Trend trading is more complicated. It places a sell or buy order based on the cryptocurrency’s price trends.

Hedging means simultaneously placing two orders that are opposing positions in the market with equivalent volume to cancel out the profit and loss. Effectively hedging against risk. The emergence of quantitative trading signifies the maturing of the cryptocurrency market.