Back

Trading strategy NOT requiring market direction prediction.. Possible? Available?

Hi,

Is it possible?  Is it possible to develop a trading strategy which does not require any sort of market direction prediction?  Strategy just does not care if market goes up or down or sideways.  Of course, performance will be dependent on market conditions and/or movements but it still makes profit more than riskfree ROI rate in any market conditions (like  bullish, bearish, up, down, volatile, tranding, range bound, or any).

Market conditions agonistic in real sense..

I have some idea on this but I would like to know your views on the subject. 

Looking forward to constructive criticism and feedback.

Thanks in advance

Shailesh.

 

Update Backtest







0

The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by QuantConnect. In addition, the material offers no opinion with respect to the suitability of any security or specific investment. QuantConnect makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances. All investments involve risk, including loss of principal. You should consult with an investment professional before making any investment decisions.


Hey Shailesh,

I believe the type of strategy you are referring to is a market neutral strategy. These are strategies which seek to profit in all market conditions. A truly market neutral strategy has 0 correlation with the market, but that is difficult to achieve in practice. A good example of a market neutral quantitative strategy is a statistical arbitrage strategy. This strategy neutralizes exposure to overall market trends by taking long positions in stocks with rising demand and short stocks with growing sell pressure.

You can also create Insights which do not make predictions on market price movement but rather market volatility.

Insight(symbol, timedelta, InsightType.Volatility, direction)

Sources:
[1] Market-Neutral Strategies: An All-Weather Investment Option
[2] Investopedia: Market Neutral Definition
[3] Wikipedia: Market Neutral

0

The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by QuantConnect. In addition, the material offers no opinion with respect to the suitability of any security or specific investment. QuantConnect makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances. All investments involve risk, including loss of principal. You should consult with an investment professional before making any investment decisions.


Hi Rahul,

Well, Market neutral strategy fits the bill in a way up to some extent.  But I was not referring to MNS,  MNS works well for broad diverse universe. 

What I am referring is to strategy that performs well irrespective of asset or asset class.  In other words, a strategy that performs well for each and every individual asset meaning any currency pair, any equity stock, any crypto currency pair, any option/future contract, any MF, any ETF, or rather any tradable asset or instrument.

I beleive it may be very ambitious but not impossible.

Thanks

Shailesh.

0

Update Backtest





0

The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by QuantConnect. In addition, the material offers no opinion with respect to the suitability of any security or specific investment. QuantConnect makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances. All investments involve risk, including loss of principal. You should consult with an investment professional before making any investment decisions.


Loading...

This discussion is closed