Quant Hedge Funds Balance Computer and Brain Power

Armed with this knowledge, it learns trading behaviors such as buying dips or selling high over time, based on what it has gleaned about the market from past and present data. Man AHL s algorithms work off vast data sets that include 1.5 trillion price ticks as well as options information and index feeds. Billions of new price ticks can be added to the system in a single day. The firm has invested in high-powered hardware to process this information. But traders and scientists must know how the algorithms work and how to avoid overfitting data to a trading hypothesis, warns Anthony Ledford, chief scientist at OMI.