Quote from OddTrader:
Here is my thesis:
Strategy=rules with procedures;
Procedure=Sequences of rules;
Method={a set of strategies(=rules and procedures) for analysing prices, analysing volume, decison-making logics, what-if analyses, etc.};
System={a set of methods individually and collectively designed for entry, exit, reversal, stop-loss, profit taking, sizing, risk/money management, limitations, secrets, myths, etc. };
We usually call stop-loss strategy/method, seldom call it stop-loss system.
A method itself alone cannot be (back/forward-)tested to provide a complete view/ statistics of system performance. Neither with an incomplete system.
Usually system would be fully/ highly mechanical/objective, with most operationally defined rules, no matter how(ever too) rigid.
Method can be either mechanical or nothing mechanical at all (i.e fairly flexible/subjective), even with some unwritten intuitive rules on-the-fly. Proprietary trading has a relatively high degree of subjectivity for its trading methods.
Just 2 cents, or less!
There are many authorities on this. They are in basic agreement as well.
It certaintly is anyone perogative to do anything they want or think anything they please.
When it comes to making money or becoming a successful trader, at some point a person making a serious endeavor must school himself in these matters for several basic reasons.
Having a clear understanding of the heirarchy of trading is about the midpoint in this grueling endeavor. Anyone can fool around as long as they wish and anyone can skip this task. As stated here it is not even a constructive task.
