Connors Research Traders Journal (Volume 59): Part 2 – Quantamentals; The Next Great Forefront of Trading and Investing
In the previous issue of the Connors Research Traders Journal, we looked at how Quantamentals is rapidly becoming the next frontier of trading and investing.
We view Quantamentals as having three parts:
- Quantitative Analysis
- Technical Analysis
- Fundamental Analysis
For decades, each of the above were viewed as separate fields.
Fundamental Analysis has been around the longest and has the most assets under management.
Technical Analysis started mostly in the futures industry and has since expanded into other asset classes.
Quantitative Analysis has a shorter and colorful history, seeing firms such as AQR and Renaissance Technologies producing spectacular results. Quant strategies have also been blamed for many of the larger sell-offs and panics in recent history, with the failure of Long Term Capital Management being the most famous example that comes to mind.
Many fundamental analysts believe technical analysis and quant trading is BS. Many technicians believe fundamentals have no edges. Many quants, armed with their mathematical pedigree and PhDs, naturally believe that they’re the smartest people in the financial markets.
Frankly, we don’t fully agree with any of these views. What we believe is that each style has many positive aspects and by combining the best of each, you can put yourself in the position to build better trading and investing strategies.
This is exactly what we aim to do with Quantamental Strategies.
For those of you who are MMA fans, as the two of us are, you know the best fighters in the world are the ones who can both strike and grapple. The pure strikers don’t dominate MMA. Great grapplers and wrestlers also fail to dominate at the highest levels of mixed martial arts. It’s the fighters who have successfully blended a number of skills together who become the best in the world.
We view investing and trading in much the same way!
What Quantamentals does is blend the best of quantitative analysis, technical analysis and fundamental analysis with the objective of making you a more complete and powerful trader and investor. Why limit yourself to one style when a combination of styles (quant plus fundamental plus technical) can take your trading to the next level?
If you’d like to go further with this, we’ll teach you some of the better indicators for each of the above to blend into your strategies.
We’ll also discuss our upcoming seminar where we’ll spend a day together teaching you Quantamental Analysis along with us sharing with you a number of high performing Quantamental trading and investing strategies we’ve created.
More Knowledge To Improve Your Trading
1. Quantamentals Webinar – Are you looking to learn more on how to apply Quantamentals to your trading and investing?
We’re conducting a 45-minute webinar on Monday, September 16 or Friday, September 20 at 1 pm ET to teach you more about Quantamental Trading and to introduce you to a 1-day seminar we’ll be holding.
2. Become a Master Swing Trader in 10 Weeks… click here for more information
The passive investment industry states there is no Alpha in the markets. This book proves them wrong!
The Alpha Formula – Beat The Market With Less Risk teaches you strategies and portfolios with historical Alpha in Stocks, ETFs, and Fixed Income.
Backed by many quantified, systematic strategies, dozens of academic studies and combining behavioral finance with Ray Dalio’s correlation research, this book will teach you new, easy to understand quant strategies you can apply immediately.
Larry Connors & Chris Cain, CMT