What is systematic trading?
It’s a method of trading using automated computer systems and frameworks, which streamlines processes and reduces the likelihood that a trade may be missed due to human error. Systematic trading is mainly based on technical analysis of market data.
Where have you heard about systematic trading?
Systematic trading is most widely used by investment banks and hedge funds due to the large amount of transactions made every day. It includes both algorithmic trading and passive index tracking.
What you need to know about systematic trading.
Systematic trading is primarily used to make investment and trading decisions in a methodical way, allowing investors to set trade goals and risk controls. Many trading systems can automatically place trades with a broker.
One of the main benefits of systematic trading is that it takes the emotion out of decision-making and risk-taking, which can often hamstring investors. The alternative to systematic trading is known as discretionary trading, which is where traders rely on their own judgement about where the market is headed.