Algorithmic Trading

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Questions and Answers

What was a primary characteristic of Modernist artists' approach to interpreting reality?

  • Adherence to traditional artistic forms to convey a sense of stability.
  • Emphasis on the objective representation of the external world without personal interpretation.
  • The intentional distortion of shapes and limitations of space and time to reflect uncertain perception. (correct)
  • A focus on creating art that was easily accessible and comforting to the masses.

Which factor significantly contributed to the cultural crisis that influenced the Modernist movement?

  • The widespread embrace of Naturalism and Aestheticism.
  • The reaffirmation of Victorian morality and traditional values.
  • The growing sense of optimism and confidence in progress after years of peace.
  • The disillusionment and cynical mood following World War I. (correct)

How did Sigmund Freud's psychoanalysis impact the Modernist movement?

  • It led to a rejection of introspection and technical skill in artistic expression.
  • It reinforced the importance of conscious thought and rational behavior in art.
  • It encouraged artists to explore the unconscious and its influence on human behavior. (correct)
  • It had no discernible impact on the artistic or literary themes of the time.

In what way did Modernist poets break away from traditional poetry?

<p>By embracing free verse and unconventional language to capture emotion and personal experiences. (B)</p> Signup and view all the answers

What is a defining feature of the 'stream-of-consciousness' technique in Modernist novels?

<p>Recording the flow of thoughts and impressions as they occur in the mind. (C)</p> Signup and view all the answers

What is the significance of World War I for the Modernist movement in literature?

<p>It evoked a crisis of Western values. It emphasized alienation, fragmentation, and the rejection of traditional forms. (A)</p> Signup and view all the answers

How did the Modernist movement redefine people's understanding of the past?

<p>By viewing the past as something that could be remoulded in a personal, original way. (C)</p> Signup and view all the answers

What is the aim of Modernist poetry?

<p>To convey inner sensations, visions, and experiences in unconventional style. (C)</p> Signup and view all the answers

What was a key change in the structure of the novel from the Victorian era to the Modernist era?

<p>The time of the novel was subjective and internal and linear plot diminished. (C)</p> Signup and view all the answers

What are the two factors that contributed to the structure of the modern novel?

<p>New concept of time and Freud's theory of the unconscious. (C)</p> Signup and view all the answers

Flashcards

Modernism

The rejection of traditional structures and organization, fragmentation of values and the alienation of the individual in the face of modernity.

Sigmund Freud's psychoanalysis

Recognized the unconscious in affecting human behavior, radically changed time and space concepts.

Einstein's theory of relativity

Radically changed the concept of time and space.

Modern poetry

Poetry freed from traditional structure and moral comment, aiming for precision and concreteness.

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Imagism

A movement that emphasized clear, precise images and experimented with unconventional language and rhythms.

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Modern Novel

Explores subjective experiences, depicting character's minds rather than external events in chronological order.

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Psychological Novelists

Psychological novelists focused on the development of the character's mind and on human relationships.

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Modernist Novelists

Novelists who chose subjective narrative techniques to explore the mind of one or more characters.

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Virginia Woolf

Virginia Woolf suggested that the novel should represent the impressions of consciousness.

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Subjective time

Time was subjective and internal; the past and present determine the personality.

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Study Notes

Algorithmic Trading

  • Algorithmic Trading (Algo Trading/Black-Box Trading) uses computers for trading decisions based on pre-programmed instructions.
  • Algorithmic trading can account for 70-80% of US equity trading.

Simple Algorithmic Trading Example

  • An example of a trading instruction is purchasing 100 shares of AAPL if the 50-day moving average crosses above the 200-day moving average.

Benefits of Algorithmic Trading

  • Enables trade execution at optimal prices.
  • Reduces transaction costs and the risk of human error.
  • Allows backtesting of trading strategies.
  • Automates the trading process.

Algorithmic Trading Strategies

  • Trend Following: Identifies and follows market trends using tools like moving averages and MACD.
  • Mean Reversion: Pinpoints overbought or oversold market conditions, using Bollinger Bands and RSI.
  • Arbitrage: Leverages price discrepancies across different markets for risk-free profits.
  • Market Making: Places buy and sell orders, profiting from the spread and enhancing market liquidity.
  • Statistical Arbitrage: Spots statistical relationships between assets for strategies like pairs trading.
  • Execution Algorithms: Breaks down large orders to minimize market impact, using strategies like TWAP and VWAP.

Algorithmic Trading Platforms

  • Common platforms include MetaTrader 4/5, TradingView, Interactive Brokers, TD Ameritrade, Bloomberg, QuantConnect, and proprietary platforms.

Algorithmic Trading: Getting Started

  • Requires learning a programming language like Python or R, understanding financial markets, developing and backtesting a strategy, automating it, and continuous monitoring.

Algorithmic Trading Risks

  • Model risk: The trading model might not perform as anticipated.
  • Overfitting: The model could be excessively complex, hindering its ability to generalize effectively.
  • Data mining bias: The model might detect false correlations in the data.
  • Technical glitches: The trading algorithm could experience malfunctions.
  • Black swan events: Unexpected events could lead to substantial losses.

Algorithmic Trading Resources

  • Books: "Algorithmic Trading: Winning Strategies and Their Rationale" by Ernie Chan, "Quantitative Trading: How to Build Your Own Algorithmic Trading Business" by Ernie Chan, and "Advances in Financial Machine Learning" by Marcos Lopez de Prado.
  • Websites: Quantopian, QuantConnect, and Investopedia.
  • Online Courses: Available on Coursera, Udemy, and edX.

Key Points for Algorithmic Trading

  • Algorithmic trading is a potent tool needing programming, financial, and statistical expertise.
  • It presents inherent risks.
  • Careful preparation and implementation are crucial for success.

Linear Algebra and Analytical Geometry I

  • Chapter 1 discusses systems of linear equations, a fundamental concept in linear algebra.

Equation Definitions

  • Definition 1.1.1: A linear equation with n unknowns $x_1, x_2,..., x_n$ has the form: $a_1x_1 + a_2x_2 +... + a_nx_n = b$, where $a_1, a_2,..., a_n, b$ are given constants.
  • Definition 1.1.2: A system of m linear equations with n unknowns $x_1, x_2,..., x_n$ is a set of equations in the form provided, where the $a_{ij}$ and $b_i$ are given constants.
  • Definition 1.1.3: A solution to a system of linear equations is an n-tuple $(x_1, x_2,..., x_n)$ that satisfies all equations in the system.
  • Definition 1.1.4: Solving a system means finding all solutions, collectively known as the solution set.

Geometric Interpretation

  • In $\mathbb{R}^2$, a linear equation represents a line.
  • In $\mathbb{R}^3$, a linear equation represents a plane.
  • The solution set for a system of two equations can be a unique solution (intersecting lines), no solution (parallel lines), or infinite solutions (coinciding lines).

Equivalent Systems

  • Definition 1.3.1: Two systems of linear equations are equivalent if they share the same solution set.
  • Proposition 1.3.2: The following operations transform a system into an equivalent system such as exchanging two equations, multiplying an equation by a non-zero constant and adding a multiple of one equation to another.

Gauss Elimination Method

  • Gauss's elimination is a systematic approach to solving linear equation systems by transforming the system into an easier, equivalent form, using the operations of Proposition 1.3.2.

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