Trading News vs. Trading System

Amateur Traders try to trade news while Systematic Traders trade prices. While Amateur traders are busy trying to figure out what the latest news on TV mean, Systematic traders, are taking the signals from price behaviour in the market. Systematic traders are not predicting what the market will be doing, they are reacting to the signals from the market.

Speculate vs. React

Amateur Traders try to speculate what the market will do. Systematic Traders are engaging in what the market is doing.

Subjective vs. Objective

Amateur Traders are subjective- their interpretation of the market is dependent on how they feel and how other subjective factors weigh on their mind at that time.Systematic Traders are objective like blind followers and all they see is what the market does.

Anarchy vs. Discipline

Amateur Traders trade randomly and even though they believe in the idea of rules, they hardly ever follow them.  Systematic Traders have few but very strict and defined rules for managing risk, position sizing and when to trade and when not to trade.

Emotions vs. Rationality

Amateur Traders are emotionally attached to their trades and take their losses personally. Systematic Traders are unemotional because when they lose, it is simply that the market was not conducive to their system and know that they will win over in the long term.

Clutter vs. Clarity

Amateur traders use many different indicators to trade at different times and almost always inconsistently. Systematic traders follow the same set of principles in every market and every environment.

So, what would you rather be- Amateur or Systematic?

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