Systematic Advantage #25: Allows traders to follow their trading plan
One of the most important benefits of systematic trading is that it allows traders to follow their trading plans without deviation. A well-designed plan outlines a trader’s goals, risk tolerance, and individual strategies for entering and exiting trades. However, adhering to such a plan can take time due to psychological biases or market conditions.
Systematic trading solves this problem by leveraging automated algorithms that execute trades according to pre-defined criteria and rules. This ensures that the trader’s trading plan is followed without deviation, regardless of emotional factors or market pressures. By eliminating the potential for human error and psychological decision-making, systematic trading allows traders to adhere strictly to their trading plans. This offers traders a significant advantage, ensuring the plan is followed without deviation.
