Do you know modern technology and mathematical computations can make trading decision for profit by breaking down very complex data and eliminating the emotional decision-making that can occur during trading. That’s called Quantitative trading or quant strategy of trading.

Quantitative traders take a trading technique and create a model of it using mathematics, and then they develop a computer program that applies the model to historical market data. The model is then backtested and optimized. Quantitative trading algorithms are customized to evaluate different parameters related to a stock. Typically, financial institutions and hedge funds use quant strategies. As retail investors are rising in Indian markets, quantitative trading is also catching up. But it’s not all that simple, isn’t it.

To simplify quantitative strategies, Mint’s Nasrin Sultana speaks to Rishi Kohli, MD and CIO for Quant Strategies at Avendus Capital Public Markets Alternate strategies.