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Quantitative trading refers to the use of algorithms, mathematical approaches, and numbers to find market opportunities. Quants are those market participants who use this type of technique. They are programmers or traders who may specialize in using the fintech industry for coding programs according to the desired strategies. As robots carry out the executions, scalpers or fast traders prefer this type of high-frequency trading. The form of investment was previously limited to institutions and hedge funds; however, with technology and IT development, regular traders can also take advantage of it.

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Over-the-counter trading is the act of dealing buy or sell executions of the instrument without using a centralized exchange. It involves transactions through a dealer network with no physical presence, and all the trading is conducted electronically. The dealers are also market makers, where they are responsible for providing quotes. The trades are hidden from other participants along with the prices.

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Trading strategies are developed to get a definite edge in terms of risk/reward and winning probability. Over time tons of investors have laid out hundreds of game plans that differ in execution methods, monthly gains, drawdown, and complexity. While most fail in delivering results, some have stood the test of time by performing during market crashes and periods of great recessions. Arbitrage strategy is one leading game plan that capitalizes on price quotes amongst brokers for the same instrument.

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The price movements on a chart depict the combined activity of millions of traders. As market participants are humans, any repeating change in human behavior daily, weekly, and monthly leads to seasonal patterns. Within such a period, the instruments behave similarly to other assets. They may also show repetitive behaviors in their price actions. From a trading perspective, traders look out for these moments to get good setups and increase their probability of winning. A perfect entry is possible only after the identification of such trades beforehand. Our article will discuss the crucial factors an investor should look for when trading seasonal patterns.

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A recession is a period where the global economy, or a specific economic activity, faces a period of contraction. This causes turmoil and there are many widespread issues with the markets. There is less spending, fewer jobs, companies going into bankruptcy, etc., due to the loss of confidence in the financial sector. High-interest rates, lack of regulations, poor price controls, and market crashes are also significant reasons behind such disruption.

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Exotic currency pairs have a major economy's currency alongside a weak one, or two poor ones against each other. Some good examples are USD/MXN, EUR/HUF, EUR/TRY, etc. The varying liquidity and volatility related to these pairs require that a trader change their trading approach if shifting from major or minor currencies. Understanding how exotics works can help you tank in a good number of pips, which may not be possible with other pairs. Our article will discuss how exotic currency pairs can be traded in the best possible way to avoid unnecessary drawdowns.

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Drawdown in trading refers to the amount of risk exposure your account faces. As you open up a position on any financial instrument, your trade will not hit the desired profit in one go; instead, it will face some ups and downs from the initial entry point. The executions moving against your position alert the performance statistic to note the initial equity depreciation. While it may seem absurd, some traders use this type of trading with a high risk as their primary strategy. An example is where an investor with $10,000 in his balance opens a long position on GBP/USD at 1.13000. He does not have a stop loss and would welcome any downside to getting to his profit of 50 pips, i.e., 1.13500.

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A trading journal is a diary where a trader keeps all the records of his positions, mistakes, and future goals. By keeping a note of the essentials, it is possible to remember all the errors and avoid them in further trading. The continual process will result in increasing your trading consistency over time. Previously market participants used to write everything down on a piece of paper, but with the development in the fintech sector, automatic journals have been developed which note down your positions from the platform in robot mode. All the top traders and institutions recommend keeping a good record of all your trades.

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The world of currency trading offers three different forms of pairs to traders, i.e., major, minor, and exotic. Major pairs combine the US dollar with other vital currencies such as the Euro, the Great British pound, Japanese yen, etc. These are the most widely traded currencies, because they have the best liquidity to offer. On the other hand, minor pairs have less volume as they include cross currency pairs, e.g., EUR/JPY, CAD/CHF, etc.

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In the financial industry, you may have heard about swing, position, day trading, etc. However, there is another class in which we classify the big tree that is called Asymmetric trading.

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