Systematic Advantage #38: Systems can’t be bullied into a position
Unlike discretionary traders, who may be influenced by external pressures, fear, greed, or personal biases, a systematic trading system strictly follows pre-defined rules and algorithms. It does not deviate from its set parameters under any circumstances, making it resistant to ‘bullying’ into taking a trading position.
This characteristic provides an additional layer of protection against impulsive and potentially harmful trading decisions. For instance, in a volatile market where panic selling or buying may be rampant, a systematic approach remains steadfast, executing trades based on analyzed data and well-established strategies. It eliminates the element of human emotion from the trading process, resulting in more consistent and objective investment decisions. This advantage highlights the value of incorporating systematic trading systems in a balanced, diversified investment strategy.
