Quantitative investing
with a twist

 

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Man or Machine?

Systematic or discretionary trading? What’s better?

As quants we’re inclined to favor a systematic approach. At the same time we realize that systematic and discretionary trading processes are essentially the same, except for that the former encapsulates the decision-making dynamics in a rules-based framework while the latter doesn’t.

Coded trading systems enable us to methodically repeat a tried and trusted method. That’s a great thing. We let the machine place our bets in the markets and remove ourselves from the day-to-day trading process. If our betting system has edge, we should be rewarded with gains.

Humans on the other hand can be highly inventive and see things which a machine cannot – or at least not easily. But how can you make sure that what you see is real and not a noisy Fata Morgana of the markets? Well, there’s never a guarantee, but when 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)

WHO WE ARE

We are two quantitative traders with a background in professional investment management, derivatives trading and quantitative research. We are interested in quant-driven trading strategies and, perhaps most importantly, are supported by an AI bot and a really cool dog.

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WHAT WE BELIEVE IN

We think there is a better way to investing than long-only buy-and-hope. We believe portfolios must be protected against large drawdowns while staying exposed to the topside at the same time. We are convinced that there is alpha in the interplay between systems and humans.

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WHAT WE DO

Model-driven, but human – that’s our philosophy. We combine systematic strategies with opportunistic trade ideas and long volatility positions. Most importantly, we trade the 2Q Portfolio live and with real money. We share our trading and research insights in our 2Q Newsletter.

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The 2Q Newsletter

While we analyze important market developments, our 2Q Newsletter aims to synthesize quant-driven trading ideas into actionable investment themes. 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 makes the 2Q Newsletter original and unique.

Our Core Values

  • We want to be guided by what matters: data, numbers, facts

  • We search for anomalies in the data and, where possible, seek to enter into trades to exploit them

  • We like to inspire you so that you can become a better trader

  • We always want to improve our trading, do something better, find something new

  • We are agnostic to what the markets seem to be or what people say they are. Biases can kill you when trading in the markets

  • We read a lot, and across many subjects. This may not be a competitive advantage, but not doing it simply isn’t an option

  • We study market history and investors’ traumas to become better traders