Systematic Trading
Trading by explicit, pre-defined rules for entries, exits and size, so that the same market conditions always produce the same decision.
Systematic trading replaces case-by-case judgement with a written rulebook: which instruments to trade, what signal opens a position, where the stop and target go, and how large each position is. If two people apply the rules to the same data, they take the same trades.
The main benefit is testability. Because the rules are explicit, they can be backtested, measured (expectancy, drawdown, Sharpe ratio) and improved one change at a time. Consistency also removes many psychological errors — revenge trades, moved stops, skipped signals after a losing streak.
Systematic does not have to mean automated: a trader can follow mechanical rules by hand. The opposite is discretionary trading, where the trader decides each trade in context. Many traders combine the two, using rules to generate candidates and judgement to filter them.
On the desk
Rules: on daily bars, buy when the 50-day moving average crosses above the 200-day; exit on the reverse cross or a stop at 2× ATR; risk 1% of equity per trade. Every element is defined in advance, so the full history can be backtested before a single live order.