Two basic types of quantitative strategies

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Today’s finance world is very creative and complex. There is no shortage of ideas what or how to trade. However, we can classify all quantitative trading strategies into two basic categories:

Mean reversion strategies.Momentum (“trend following”) strategies.

Mean reversion refers to data (prices, in our case) going back to the longer term mean. They usually have high smaller wins rate. Examples of such strategies are statistical, information arbitrage, pair tradin...