• btmakingcents

Systematic Trading vs Discretionary Trading

Updated: Jul 19, 2020

Systematic Trading makes SENSE?

Systematic trading is probably what most beginners start with.


If us Singaporeans are good at one thing, I would say that it is to study from textbooks and answer exam questions word-for-word based on memory. After all, we've been doing this probably since Kindergarten.

This is the very basis of our entire education system and if there is one thing we are good at, it would be the mindless application of theoretical concepts in a practical situation.

In investing, systematic trading is learning the concepts from books or videos (eg: Rayner), and from there once you understand chart patterns to just go in and test the market.

Surely the books cant be wrong? The people who wrote them are EXPERTS and if they are not correct they wouldn't be in book.

Discretionary Trading makes CENTS?

In my days of trading (literally), I've come to realize that systematic trading does have it limits because unfortunately, as with everything else in life, the stock market is none other than a cloud filled with emotions.

It is the emotions of every individual in it which drives the prices up and down. Sure there are some strong fundamentals which support decision making but when it comes to making that one trade, it is ultimately up to the individual.

For example, we all know that a crash is coming, everyone says its coming and there are very compelling indicators that it is coming. But does anyone actually know when the day will be?

My preference.

As a beginner and a person with a relatively low risk appetite, I'm more towards systematic trading. I see it as walking before running.

I would like to think that one of the most important fundamentals is asking yourself WHY trades work out. If you can explain why, you will understand what you did well and can hopefully replicate it if its successful or avoid it if it isn't.

It can't possibly be that "I EARNED $10,000 from a good trade" and when I ask myself how I did it, I was absolutely clueless or lucky.

But then again, on the subject of luck, I came across a formula for luck in my youth.

Yes believe or not there is a formula for being lucky. Although it may have been someone trying to smoke me, I found it well...... useful to some extent.

Disclaimer: The information published here are purely opinions/feedback and should in no way be taken as guaranteed. Readers are encouraged to do their due diligence by engaging in sufficient research before making any decisions based on materials provided.

Lovers Point Park - Monterey, CA

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