This course provides the foundation for developing advanced trading strategies using machine learning techniques. In this course, you’ll review the key components that are common to every trading strategy, no matter how complex. You’ll be introduced to multiple trading strategies including quantitative trading, pairs trading, and momentum trading.
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By the end of the course, you will be able to design basic quantitative trading strategies, build machine learning models using Keras and TensorFlow, build a pair trading strategy prediction model and back test it, and build a momentum-based trading model and back test it.
To be successful in this course, you should have advanced competency in Python programming and familiarity with pertinent libraries for machine learning, such as Scikit-Learn, StatsModels, and Pandas. Experience with SQL is recommended. You should have a background in statistics (expected values and standard deviation, Gaussian distributions, higher moments, probability, linear regressions) and foundational knowledge of financial markets (equities, bonds, derivatives, market structure, hedging).
What You Will Learn
- Design basic quantitative trading strategies
- Use Keras and Tensorflow to build machine learning models
- Build a pair trading strategy prediction model and back test it.
- Build a momentum-based trading model and back test it.
Course 2 of 3 in the Machine Learning for Trading Specialization.
Syllabus
WEEK 1
Introduction to Quantitative Trading and TensorFlow
In this module we discuss the key components that are common to every trading strategy, no matter how complex. This foundation will help guide you as you develop more advanced strategies using machine learning techniques.
WEEK 2
Build a Pair Trading Strategy Prediction Model
In this module, we introduce pairs trading. We will discuss what pairs trading is, and how you can make money doing it. We will discuss what you need to know about the members to form a suitable pair.
WEEK 3
Build a Momentum-based Trading System
Momentum trading is a strategy in which traders buy or sell assets according to the strength of recent price trends. Price momentum is similar to momentum in physics, where mass multiplied by velocity determines the persistence with which an object will follow its current path (like a heavy train on a track). In financial markets, however, momentum is determined by other factors like trading volume and rate of price changes. Momentum traders bet that an asset price that is moving strongly in a given direction will continue to move in that direction until the trend loses strength or reverses. This module teaches you all about momentum trading.
WEEK 4
Build a Pair Trading Strategy Prediction Model
In this module, we introduce pairs trading. We will discuss what pairs trading is, and how you can make money doing it. We will discuss what you need to know about the members to form a suitable pair.
