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Pros and Cons of System and Discretionary Trading
wisdom_consultant Posted 20 Sep. in #Trading #Trading System #Trading Psychology #Trading Styles29/58
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In today's article I want to talk about two types of traders. They define two different styles of trading.
The important thing I realized, engaging in trading - there is no trading system that would suit everyone. We all have different financial goals and a different perception of risks. Read this post until the end, think and decide what style of trading suits you most.
System Trading
System Trading is based on specific rules that the trader does not have the right to violate. This means that if trading strategy gives you a signal to buy, then you should definitely buy. There is no place for the human factor and reflection.
The first systems traders, which I learned about, were "turtle-traders." They traded futures on the 20 and / or 50-day breakdown. In total, I think, about 18 instruments. Their task is to catch the trend. Drawdown reached in some cases 40%. That is, the number of losing trades was great.
Now imagine that a system trader suddenly decides not to enter the market, although he got strategy signals. And just at this moment trend starts - a source of profits of this trading style. As you know, one mistake, so it is the human factor, resulting in a significant l…
The important thing I realized, engaging in trading - there is no trading system that would suit everyone. We all have different financial goals and a different perception of risks. Read this post until the end, think and decide what style of trading suits you most.
System Trading
System Trading is based on specific rules that the trader does not have the right to violate. This means that if trading strategy gives you a signal to buy, then you should definitely buy. There is no place for the human factor and reflection.
The first systems traders, which I learned about, were "turtle-traders." They traded futures on the 20 and / or 50-day breakdown. In total, I think, about 18 instruments. Their task is to catch the trend. Drawdown reached in some cases 40%. That is, the number of losing trades was great.
Now imagine that a system trader suddenly decides not to enter the market, although he got strategy signals. And just at this moment trend starts - a source of profits of this trading style. As you know, one mistake, so it is the human factor, resulting in a significant l…
