Scribd Logo
Upload

Welcome to Scribd!

  • 32 views

    1.1 Why You Need A Trading System

    Uploaded by

    TUAN NGUYỄN
    This document discusses trading systems and why using a trading system is important. It states that while many claim to use quantitative and scientific trading systems, in reality many systems are just repackaged technical analysis that is not truly quantitative. Additionally, it notes that simple trading systems can be very effective, especially when applied to a portfolio of markets, and that success comes more from money management and risk controls than the system itself. The key reason given for needing a trading system is that most traders are unable to consistently beat the market through discretionary trading alone, so a system is necessary to improve one's chances of long term profits.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    1.1 Why You Need A Trading System

    Uploaded by

    TUAN NGUYỄN
    32 views1 page
    This document discusses trading systems and why using a trading system is important. It states that while many claim to use quantitative and scientific trading systems, in reality many systems are just repackaged technical analysis that is not truly quantitative. Additionally, it notes that simple trading systems can be very effective, especially when applied to a portfolio of markets, and that success comes more from money management and risk controls than the system itself. The key reason given for needing a trading system is that most traders are unable to consistently beat the market through discretionary trading alone, so a system is necessary to improve one's chances of long term profits.

    Original Title

    19

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This document discusses trading systems and why using a trading system is important. It states that while many claim to use quantitative and scientific trading systems, in reality many systems are just repackaged technical analysis that is not truly quantitative. Additionally, it notes that simple trading systems can be very effective, especially when applied to a portfolio of markets, and that success comes more from money management and risk controls than the system itself. The key reason given for needing a trading system is that most traders are unable to consistently beat the market through discretionary trading alone, so a system is necessary to improve one's chances of long term profits.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    32 views1 page

    1.1 Why You Need A Trading System

    Uploaded by

    TUAN NGUYỄN
    This document discusses trading systems and why using a trading system is important. It states that while many claim to use quantitative and scientific trading systems, in reality many systems are just repackaged technical analysis that is not truly quantitative. Additionally, it notes that simple trading systems can be very effective, especially when applied to a portfolio of markets, and that success comes more from money management and risk controls than the system itself. The key reason given for needing a trading system is that most traders are unable to consistently beat the market through discretionary trading alone, so a system is necessary to improve one's chances of long term profits.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    Trading

    Systems

    something which is rigorously scientific and surely beyond the retail-oriented trumpery
    wares of common technical analysis, expect to meet many system traders that resell
    themselves as “quantitative traders”. If the term “quantitative finance” serves to divide
    the system traders that base their decisions on statistics from those analysts that just
    grasp the artistic and esoteric side of technical analysis, we all agree on calling
    ourselves “quantitative traders”.
    Since a scientific appeal is the best way to sell something, there is nowadays a wide
    rush in the markets to give a deep scientific status to the trading systems industry. This
    approach seems to take for granted that a trading system must be a long series of rules,
    programmed in a complicated way, and full of breathtaking algorithms. Salesmen know
    very well that complexity raises prices. But it also raises the probability that a trading
    system will fail in the real world, and there is no approach more false than this.
    Many commercially available formulas you can find in any technical analysis software,
    when properly tested and applied to price series, show a real market bias; that is they
    have a trustful predictive power. Trading systems could be very easy in their logical
    implementation, like a channel breakout, an indicator, a moving average, and to rely on
    your own trading decisions on something that is “easy” will not reduce your success
    probability; on the contrary it will increase it. On the way to success a lot will be done
    by money management and portfolio construction, risk management and timeframe, so
    do not be worried when you examine a trading formula that is simple and produces an
    equity line that appears unexciting, because you need to always reason under the
    portfolio constraint. It must be clear from the very beginning that a mediocre trading
    system – if applied to a portfolio of markets – will easily produce a good looking
    equity line.

    1.1 Why you need a trading system

    A huge economic literature shows without any doubt that just a few percent of traders
    are able to beat the market year after year. Most of both the retail and institutional
    traders sooner or later will go bust. If you do not belong to the lucky category of
    winning discretionary traders, then the only option for you in order to survive is the use
    of trading systems. If you have purchased this book you are most likely not a
    successful discretionary trader: in my experience successful discretionary traders are
    intuitively blessed and are unconsciously able to predict the market moves with their
    gut feeling. On the contrary there are many successful money managers, institutional
    and retail traders that profit from predetermined trading strategies and investing
    methodologies. But it
    5

    You might also like