Master the basics and intricacies of quant and high-frequency trading with the latest edition of this accessible and widely-read guide
In the newly revised third edition of Inside the Black Box: A Simple Guide to Systematic Investing, veteran practitioner and investor Rishi K Narang delivers another insightful discussion of how quantitative and algorithmic trading strategies work in non-mathematical terms. As with prior editions, this third edition is full of timeless concepts and timely updates. Supplemented by compelling anecdotes and real-world stories, the book explains the most relevant developments in the discipline since the publication of the second edition in 2013.
You'll find out about the explosion in machine learning for alphas, signal mixing, data extraction, and execution, as well as the proliferation of alt data and a discussion of how to use it appropriately. You'll also discover:
● Updated discussions of approaches to research
● Newer and more effective approaches to portfolio optimization
● The frontiers of quantitative investing
Inside the Black Box explains how quantitative and algorithmic trading strategies work in non-mathematical terms supplemented by anecdotes and real-world stories. There is a large chasm in the understanding of what quants do with quants often perpetuating the darkness by cloaking even trivial facts about their strategies and operations in secrecy. Most of their strategies are understandable and with that understanding investment professionals can better assess a particular fund's value. The book also explains how quant strategies fit into a portfolio, why they are valuable, and how to evaluate a quant manager. How do quants capture alpha? What is the real level of discretion in quant trading? What is the difference between theory-driven systems vs. data-mining strategies? What are the typical structures of quant systems? How do quants model risk? How do you know if it works? What are execution algorithms?
