Systematic or discretionary trading? What’s better?
While we’re inclined to favor a systematic approach as quants, we realize that systematic and discretionary trading processes share many similarities. The key difference is that the former encapsulates the decision-making dynamics in a rules-based framework, while the latter doesn’t.
Coded trading programs allow us to systematically repeat a tried and trusted method. That’s a great thing. The machine places our bets in the markets while we remove ourselves from the day-to-day trading process. If our trading program has edge and is resilient in design, we should be rewarded with gains.
Humans on the other hand can be highly inventive and see things which machines cannot – or at least not easily. But how can you make sure that what you see is real rather than a noisy Fata Morgana of the markets? Well, there’s never a guarantee, but once you’re able to blend statistical observations with long-term trading experience, you can increase the odds of discovering something valuable.
Twoquants® is both. Model-driven, but human. That’s our recipe for playing the hardest game in the world.
“No man is better than a machine, and no machine is better than a man with a machine.” (Paul Tudor Jones)