Parrot Trade
  • Parrot Trade
  • Introduction
  • Background of the project
  • Project Overview
  • Technical Overview
  • Technical architecture overview
  • Core functions and features
  • Data collection and preprocessing
  • Data cleaning and denoising
  • Data standardization and normalization
  • Data transformation and feature engineering
  • AI intelligent learning and training model
  • Neural network model architecture
  • Supervised and unsupervised learning algorithms
  • Model evaluation and optimization strategies
  • Intelligent Trading Strategy
  • Risk Management and Money Management
  • Real-time decision-making and trade execution
  • Technical implementation and system architecture
  • Data storage and processing
  • Real-time data stream processing
  • Distributed computing and high availability
  • Security and Privacy Protection
  • Development Roadmap
  • Commercial Application and Value
  • Conclusion and Outlook
  • Appendix
Powered by GitBook
On this page

Risk Management and Money Management

  • Risk management and money management play a vital role in quantitative trading. They help investors control losses, protect funds, and improve long-term profitability. Here are parrot’s risk management and money management strategies:

    1. Risk management:

    • Stop loss strategy: Set a stop loss price and automatically stop the loss when the transaction reaches a certain level of loss to control the loss.

    • Position control: Control the position ratio of a single transaction to avoid huge losses caused by over-investment.

    • Diversification: Diversify your investments across different assets, markets, or strategies to reduce overall portfolio risk.

    • Volatility control: Adjust trading strategies according to market volatility and reduce positions in times of high volatility.

    • Transaction monitoring: monitor transaction execution in real time, adjust strategies in a timely manner to respond to market changes, and prevent risks caused by technical problems or market abnormalities.

    2. Fund management:

    • Fixed proportion position: allocate funds to each transaction according to a fixed proportion, such that the risk of each transaction does not exceed 1% of the total funds.

    • Kelly's formula: Calculate the optimal position ratio based on the winning rate and odds of the trading strategy to maximize long-term returns.

    • Dynamic position adjustment: Adjust position proportions based on current market conditions and strategy performance to avoid over-investment or over-conservatism in different market environments.

    • Fund protection: Set a maximum loss limit, stop trading when the account loses more than a certain percentage, and re-evaluate strategies and risks.

    • Compound interest investing: Reinvest trading profits into transactions to accelerate capital growth, but the risk needs to be carefully controlled.

    The comprehensive use of risk management and fund management strategies can help investors effectively manage risks, protect funds, and improve long-term profitability in quantitative trading.

PreviousIntelligent Trading StrategyNextReal-time decision-making and trade execution

Last updated 1 year ago