Ernie Chan Explains Intra-Day Trading And Low Volume

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On Friday, the show featured Ernie Chan, Managing Member of QTS Capital Management and “expert in the application of statistical models and software for trading currencies, futures, and stocks.”

Last Friday, Benzinga’s #PreMarket Prep show featured Ernie Chan as a guest. The expert went into several issues including his mathematical background, his professional history, his trading strategy and data mining, among other issues. This article will focus on some of his plays – mostly intra-day trades.

“We focus on intra-day trading, so our holding would be… hours,” his started by explaining. “We like intra-day trading because of statistical significance. If we have more trades, we are able to tell whether a trading strategy works or not much quicker,” he continued.

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Commodities And Intra-Day Trading

At one point in the interview, Chan looked into commodities and intra-day trading. For commodities that trade at lower volumes, the holding periods are longer – sometimes weeks, he explicated. “You can spread it out over days, even, to get in without a major impact on return,” he assured. In addition, the fund has several different strategies, so, not all strategies need a lot of volume to get in and out, he added. “Low volume can be managed if you have the appropriate strategy.”

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.