Trading Systems As A Determining Factor in Trading Performance
by Dr. Gandevani
Studies on individual investors and professional fund managers indicate that one reason professional fund managers perform more consistently is their reliance on trading systems for making investment decisions. It could be hypothesized that a trading system is a determining factor in producing higher performance. This research sought to validate that hypothesis by investigating the effect of trading systems on individual trading performance, measured by investors’ trading decision accuracy rates. In particular it examined the positive relationship between the extent of investors’ reliance on trading systems and their performance level. A trading system is a collection of technical trading rules that could enhance an investor’s decision accuracy and predictive power in buying or selling a security or a commodity future contract. For optimum performance and profit, a trading system helps an investor buy or sell a security at some specific price at a particular time. Performance is the net profit gained for an investor after liquidating all his or her holding positions.
5.0 out of 5 stars A must read for the serious trader., March 1, 2009
Dr. Gandevani’s book “Trading Systems as a Determining Factor in trading Performance” takes an in depth look through his scientific research, the relationship between traders and tading systems. He proves that traders are much more suited to perform better in the markets if they utilize a well proven system or methodology. However, due to cognitive error and psychological slip ups, the trader doesn’t follow the systems every signal even though the system has a proven track record. For the first time, Dr. Gandevani has given us a book which essentially describes in great scientific detail that humans will always interfere with the performance of any system or methodology in the markets, thus creating pitfall towards sunccess. This book is a must read for the serious trader who can identify with the results he has proven.