Man or Machine?
Systematic or discretionary trading? What’s better?
While we’re inclined to favor a systematic approach as quants, we realize that systematic and discretionary trading processes share many similarities. The key difference is that the former encapsulates the decision-making dynamics in a rules-based framework, while the latter doesn’t.
Coded trading programs allow us to systematically repeat a tried and trusted method. That’s a great thing. The machine places our bets in the markets while we remove ourselves from the day-to-day trading process. If our trading program has edge and is resilient in design, we should be rewarded with gains.
Humans on the other hand can be highly inventive and see things which machines cannot – or at least not easily. But how can you make sure that what you see is real rather than a noisy Fata Morgana of the markets? Well, there’s never a guarantee, but once you’re able to blend statistical observations with long-term trading experience, you can increase the odds of discovering something valuable.
Twoquants® is both. Model-driven, but human. That’s our recipe for playing the hardest game in the world.
“No man is better than a machine, and no machine is better than a man with a machine.” (Paul Tudor Jones)
WHAT WE DO
Model-driven, but human – that’s our philosophy. We combine systematic strategies in single and spread markets with option positions. Most importantly, we trade our own money live at Takahē Capital. We also share some of our trading insights in our MTTM Newsletter.
LATEST BLOG POST
Moving to Substack
We decided to move our Twoquants newsletter over to Substack.Why? It's easier for us to manage, and easier for you - our readers - to access.Visit our Substack page HERE.We also decided to rename/restart our 2Q Newsletter. Its new name is "Methods to the Madness" (MTTM). All existing subscribers will be moved over to Substack automatically. There's nothing you need to do.If you are new to Twoquants, you [...]
MEDIA
Algorithmic Advantage Podcast
Simon M. and Richard Brennan invited us to their new show to talk about Takahē Capital and our trading approach. We cover numerous topics related to trend following strategies, get into some deep discussion about how we view and take risks, and generally unpack some practical tips which you will hopefully find valuable. It’s been a fun conversation! [...]
TRADE IDEAS & TOOLS
Position Sizing: A Systematic Tool to Add to Your Trading Toolkit
When most people think about systematic trading, they likely picture a price chart with a plethora of moving averages, oscillators, and trend lines all with the goal of nailing the perfect entry right before a market takes off for the moon. While a good deal of time in systematic strategy development is devoted to entry and exit methodology, the greatest [...]
Methods to the Madness – The 2Q Newsletter
Our MTTM newsletter covers a diverse range of topics. When we write about trading, we aim to synthesize quant-driven investment ideas into actionable trades. We zero in on price trends, momentum, spreads, correlation, and volatility. We look at futures, equities, ETPs, options, and digital assets – and anything else that crosses our quantitative trading minds. This, we hope, makes the MTTM newsletter original and unique.