Quantway Consulting LLP

In this video, I introduce the basics of quantitative trading and showcase a mean reversion strategy using a specific stock as an example. You'll see how to use a Copilot prompt to generate Python code for developing a backtest. We’ll run this code to produce output in CSV format, and I’ll explain the details and demonstrate how to verify the results. Next, I’ll guide you through the process of position sizing your trades and evaluating the strategy by varying key trade parameters. Using insights from the R-multiple, I’ll show you how to optimize these parameters for better performance. Finally, we’ll pass the equity curve to Pyfolio to analyze the backtesting metrics and assess the strategy's effectiveness. By the end of this video, you’ll have a clear understanding of how to conceptualize a quantitative strategy, backtest it with Python, and evaluate its performance metrics.