What is the difference from the Trading System Trading Strategy?
trading system - it is a clear set of rules without options for alternative treatments.
trading Strategy It presupposes presentation general concept, principles and possible methods of work. This is a kernel, core idea, which we use for the formation of specific rules trading System.
As part of trading Strategy It can create many trading Systems.
The main advantages trading System:
- In trading System there are well-defined rules for the opening and closing positions.
- By trading System can trade and non-professionals. It's enough to strictly comply with the rules.
- trading System easy to test on the story with the help of special programs.
In trading System has the following disadvantages:
- trading system It can give good results with historical data and bad work now;
- virtually any trading system over time it needs to be adjusted, since the nature of the market is changing;
- It's hard time to understand that the nature of the market has changed so much, and trading System should be adjusted. And if you track the market performance and a changing them system, it is no longer System in pure form, and System and Strategy.
The main advantages trading Strategy:
- Always clear what is happening in the market from the point of view of the selected strategy;
- can be selected for the strategy to create dozens of good trading Systems;
- Strategy always works, because it is more flexible and allows for changes in the market. If the basis of system are clear "reinforced concrete" rules, the basis strategy are fundamental principles of market trade.
But also trading Strategy there are drawbacks:
- To work with trading Strategy We need professional knowledge;
- Traders need to have experience to use strategy;
- Strategy, unlike the system does not provide clear rules for the opening and closing positions. For this is trading systems.
sources:
Blog Veniamin Safin
Trading approach: working with layers. The International Academy of Investments and Trading, 2011.Fedorov AV
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