Systematic Vs descretionary

In developing any trading system, we first develop a system - a set of rules and variables that we work around to bring a slightly positive outcome.

As the years in market progresses, we tend to trust our instincts or intuitions, on whether to take the trade or exit the trade even if the system/rules won’t allow.

Now, i am eager and excited to learn from other traders out here, are they completely strictly systematic or you trade what your eyes see?

How has been your experience ? Are you comfortable letting your system decide everything or you are comfortable making an human intervention?


I am a low confident person.

I am happy with my system performance.

I always try to improve my system after back testing only.

I stopped trading by my instinct few years back.

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Systematic. Keep improving and factoring in the new market dynamics to your system which would have been ignored earlier. Being systematic been much better so far.

As you trust your instinct being a discretionary, same way if you focus on your models your instinct would trust system than yourself.


Systematic is better. I trade like a machine. No emotions whether it’s red or green on the screen. The confidence to do so comes from backtesting my trading logic over vast amount of data covering different market cycles - up, down, flat, volatile.


how do you guy’s trade 100% systematic when fully auto trading is not allowed by exchange?

Whether one needs to have auto trading depends on the trading logic. I trade using daily charts with next day long and short levels computed based on previous data analysis. Since I know the trading levels before market opens, it just needs me to place AMO at the appropriate prices. Doesn’t need auto trading for that. Also since am just buying options my risk is well defined. No matter what market does the next day I won’t loose more money than my option premium. So there is a sound money management philosophy in the process as well which doesn’t need any automation.

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I maybe am wrong but if I call my self systematic trader then it should be fully 100% auto process { trader like Jerry Parker} rather than saying I trade like a machine because as far as I have come to know that each decision is based on some emotion, without emotion no human can make any decision. so trading without 100% fully auto system one should call himself discretionary trader.
I may be wrong.:innocent::innocent::innocent:

To execute a set of trading rules over and over again every single day market is live, one needs to act like a machine. Emotions cloud judgement and is not an advisable ingredient in the trading process.

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Auto trading is just the execution part of a system. It doesn’t mean that a system can’t be followed without automation. Yes, automation does help in execution timing and reduction of slippage. You get to automation after you build or arrive at a system that suits your trading style. There are many people who trade with end of the day prices or place orders in the morning and just forget about it until square-off time… They do that because their testing of the system with such a style has shown positive expectancy in it. So, their rules are backed by confidence of past results (no guarantee of future results though). It is about arriving at rules that suit you and your context. You may not need automation or all day tracking algo here. But, some traders would want to trade in a style very sensitive to short term price movements and there automated algo is essential here.

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