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Updated on March 11, 2023

The term ‘Quant’ in technical analysis is short for “quantitative”. This refers to the use of mathematical models, algorithms, and data analysis to make predictions about future market trends and movements. The term ‘quantitative analysis’ is used with the combination of historical market data along with mathematical and statistical models. Together they are used to generate predictions about future market movements of the security.

What is the use of quantitative technical analysis?

Traders can use quantitative technical analysis in mathematical models and statistical techniques which help in analysing the available market data and identifying current market patterns, trends, and relationships. The aim of quantitative analysis is to develop a predictive model which is instrumental in making informed trading decisions.

Traders can apply quantitative analysis to a wide range of financial instruments like stocks, bonds, commodities, currencies, and derivatives. Most large investment firms and hedge funds often use quantitative technical analysis tools to make trading decisions and manage risk.