# Financial forecasting and Optimal order submission [closed]

For instance, If i have a model that can accurately forecast 3s ahead, would the trading logic be rather trivial? I have fit a series of distributions to L2 data and believe I have a fairly good grasp as to what will happen in a few seconds. Now I am at the stage where I have to design some logic in order to get trades into the market. I am working on both passive and aggressive strat, as I have generated signals for both.

Just wanted to know if that if the better the model, then you can get away with having a more basic trading logic.

## closed as unclear what you're asking by LocalVolatility, skoestlmeier, byouness, noob2, Bob Jansen♦Jan 8 at 18:07

Please clarify your specific problem or add additional details to highlight exactly what you need. As it's currently written, it’s hard to tell exactly what you're asking. See the How to Ask page for help clarifying this question. If this question can be reworded to fit the rules in the help center, please edit the question.

• Your question isn't well-formed. Since there is a bid-ask spread, all of us generally know the price of the next trade as it will be public for small orders. What makes it "optimal"? Optimality depends entirely on the standard being used and the axioms on which it is built. An optimal solution under quadratic loss won't be under all-or-nothing loss, generally. A solution that is Bayesian will not match one that is Frequentist, generally. Please expand your question so we can know what you are really trying to ask. – Dave Harris Jan 8 at 17:00
• I somewhat intentionally left it unclear, but I will shed some colour on what I am asking. I have constructed a model that is able to accurately forecast a few seconds ahead using L2 data, for which I have fit a series of distributions. I am now in the position of designing the trading logic, and just wanted to know how important the trading logic is conditioned on the fact that we have a 'forecast' of a few seconds with reasonable accuracy. – koon93 Jan 9 at 2:36
• You are not considering how the system would change once you placed orders. – Dave Harris Jan 9 at 5:11