Systematic Trading

Parent Strategy

Systematic Trading utilizes automated computer systems and frameworks. Most widely-used by investment banks and hedge funds, it is a strategy based on technical analysis of market data which streamlines processes and reduces the risk due to human error, due to the large amount of transactions made everyday. It includes both algorithmic trading and passive index tracking convenient for systematic traders essentially for the macroeconomics market using technical signals to quickly attempt market trends.

  • Systems help investors remove their emotions from trading and generate higher returns
  • Problem:  Investors need to invest in risky assets to generate returns, but psychologically they end up doing poorly
  • Solution: Use a system that eliminates emotions from investing decisions

Why Do Systems Work

  • They exploit the mistakes (often behavioral/emotional) that other investors make
  • They protect investors from making their own behavioral/emotional mistakes