Adrian ReidFounder of Enlightened Stock Trading

One Key Difference Between Systematic And Non-Systematic Trading

18 Oct 2021 · 1 min

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Short YouTube commentary by Adrian Reid contrasting systematic (rules-based) trading with discretionary (non-systematic) trading. Reid emphasizes that systematic trading requires substantial upfront work — learning software, backtesting, defining rules, and mental preparation — which makes ongoing trade execution quick and simple; by contrast discretionary trading requires ongoing analysis and decision-making for each trade.

Chapters

One of the differences between systematic trading and non systematic trading is that in systematic trading, you do all of the work and the preparation up front and then ongoing. It's pretty easy. Making each decision is very quick, right? You just run the scan and or run the back test and it tells you what trade to take. But discretionary trading, the work is ongoing. You've got to analyze every single trade and look at the market conditions and make all the decisions in the moment. So systematic trading, work upfront, easy, ongoing. Discretionary trading, easy, upfront, work ongoing. Okay? I much prefer the work upfront and easy, ongoing, but you've got to do the work, okay? Part of the work is learning the software, part of the work is understanding how to backtest, understanding the rules, but then also this mental preparation.
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