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There are several important benefits of trading in a systematic manner as opposed to trading in a discretionary manner:
- Systematic trading helps you develop a system that is compatible with your own personality and trading style - a system that you are comfortable with and that you can follow.
- Systematic trading eliminates overly emotional trading and reduce the stress of constantly making subjective, spur-of-the-moment trading decisions.
- Systematic trading gives you objective entry and exit criteria that have been validated by historical testing of quantifiable data.
- You will know the maximum peak-to-valley drawdown that your system has experienced in the past, and you can make sure that you are adequately capitalized (both financially and psychologically) to withstand another worst-case drawdown.
- You will gain confidence in both your system and yourself, thus strengthening your ability to follow your system and to trade in a highly disciplined manner.
See also these related pages about systematic trading:
- Five major benefits of systematic trading
- Five great sources of ideas for development systematic trading systems
- How to develop a systematic trading system
- Strategy optimization tips
- TradeStation Strategies with Easy Language
- Stock Trading Strategies
Books about systematic trading strategy development:
- Book Notes - New Trading Systems And Methods - Encyclopedic in it's coverage
- Book Notes - Quantitative Trading Strategies - Good introduction, but the numbers can't be replicated
- Book Notes - Money-Making Candlestick Patterns
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