How could you tell that they are not systematic?
What's better, systematic or discretionary?
- Thread starter sle
- Start date
Well, that kinda does not mean anything - some dude can leverage on some technical indicator but the strategy would be systematic by virtue of him doing the same thing every time. I think most people mistakenly think systematic equals automated.
Discretionary has to be possible for 3rd parties to make money.Therefore discretionary traders can be profitable.
sle, re: your original post...
A whole lot of decision-making in humans is (/can be) in figuring out the relevant data. And, just like when looking at any stock chart, we may sometimes end up with *so*much* data that we lean over into the dreaded analysis paralysis. {Someone in the crowd was heard to scream; women fainted; children averted their eyes...}
So, we put up Japanese Candlesticks, bar charts, moving averages, SMAs/EMAs/WMAs, MACDs, blah blah-blah, blah blahhhhh -- all seeking to distill relevant info from the (now-shapeless) morass in front of us.
I would warrant to you that 'systematic versus discretionary' is the same sort of situation, in which the things being sought (let's say, clear, accurate, efficacious, Enter and Exit signals) fall victim to the methods by which we seek them: a forest-for-the-trees issue, for sure.
A whole lot of these posts (and you too?) seem to hint that any proposed *dichotomy* between systematic and discretionary is going too far, and that these things are absolutely endpoints on a *spectrum* that, even for individual traders, may change from day to day, or from trade to trade.
Developing rules means that decision-making is simplified -- the 'Executive Function' tasks are reduced -- helping to marshal the available gray-matter on the less-well-defined stuff.
(Yeah yeah. We all knew that. I know. I know.)
A whole lot of decision-making in humans is (/can be) in figuring out the relevant data. And, just like when looking at any stock chart, we may sometimes end up with *so*much* data that we lean over into the dreaded analysis paralysis. {Someone in the crowd was heard to scream; women fainted; children averted their eyes...}
So, we put up Japanese Candlesticks, bar charts, moving averages, SMAs/EMAs/WMAs, MACDs, blah blah-blah, blah blahhhhh -- all seeking to distill relevant info from the (now-shapeless) morass in front of us.
I would warrant to you that 'systematic versus discretionary' is the same sort of situation, in which the things being sought (let's say, clear, accurate, efficacious, Enter and Exit signals) fall victim to the methods by which we seek them: a forest-for-the-trees issue, for sure.
A whole lot of these posts (and you too?) seem to hint that any proposed *dichotomy* between systematic and discretionary is going too far, and that these things are absolutely endpoints on a *spectrum* that, even for individual traders, may change from day to day, or from trade to trade.
Developing rules means that decision-making is simplified -- the 'Executive Function' tasks are reduced -- helping to marshal the available gray-matter on the less-well-defined stuff.
(Yeah yeah. We all knew that. I know. I know.)
Discretionary & systematic are on par with performance, although systematic has wider draw downs - per Barclays historical data.
Systematic is rooted in discretionary to build and run, and discretionary traders these days are using more & more automation with some of the processes. There are many discretionary traders that do not interact with a live market or trade only the close, the typically review charts & input orders when the market is closed. Some of the original market wizards that are still trading fall into this category. This approach makes it feel closer to systematic while still involving all of the traders experience in selecting the trades - it frees up the trader from being glued to their screen, allowing the trader to live any life style desired.
At the end of the day the trader at the helm will make or break the ROR - not the technique.
Systematic is rooted in discretionary to build and run, and discretionary traders these days are using more & more automation with some of the processes. There are many discretionary traders that do not interact with a live market or trade only the close, the typically review charts & input orders when the market is closed. Some of the original market wizards that are still trading fall into this category. This approach makes it feel closer to systematic while still involving all of the traders experience in selecting the trades - it frees up the trader from being glued to their screen, allowing the trader to live any life style desired.
At the end of the day the trader at the helm will make or break the ROR - not the technique.
Systematic strategies are easier to sell but I believe descretionsry systems are easier to implement as the human mind can account for more factors faster.
Really? Super basic math most people could do in their head with a tiny amount of reasoning == quant status?
Meaning if you can't even do that in your head you're nowhere near quant level. BTW I bet at least 50% of these et posters can't do that in their head.