Systematic Trading: A Unique New Method for Designing Trading and Investing Systems


  • Format: PDF
  • Pages: 326
  • Published Date: 2015


Systematic Trading is detailed, comprehensive and full of practical advice. It provides a unique new approach to system development and a must for anyone considering using systems to make some, or all, of their investment decisions. This is not just another book with yet another trading system. This is a complete guide to developing your own systems to help you make and execute trading and investing decisions. It is intended for everyone who wishes to systematise their financial decision making, either completely or to some degree.


I don’t believe there is any magic system that will automatically make you huge profits, and you should be wary of anyone who says otherwise, especially if they want to sell it to you. Instead success in systematic trading is mostly down to avoiding common mistakes such as over complicating your system, being too optimistic about likely returns,  taking excessive risks, and trading too often. I will help you avoid these errors. This won’t guarantee vast returns, but it will make failure less likely.

My main aim isn’t just to give you a single predefined system for trading, but to provide you with a modular framework which can be adapted to meet your needs. Part three describes the framework in detail. Just like you can choose different engines and tyres on a car, my framework includes options for different trading rules and position sizing calculations. I haven’t just pulled a bunch of components out of a parts bin. Each element of the framework has been carefully designed with months of careful research, built on many years of experience. I’ll explain the available options, which I prefer, and why.

Just like cars can be modified I will show you how to incorporate your own trading rules and change other parts of the framework. I will warn you of the dangers of being too aggressive, which will result in your bank account blowing up like an over-tuned engine. I’ll discuss the correct amount to bet on a particular trade, and how long to hold positions for. In part four I show how to create trading strategies for each of the three example groups I mentioned in the preface. Sticking with the car analogy you can create a sturdy family car for asset allocating investing, an experimental kit car for semi-automatic trading, or a sporty two seater convertible of a trading system if you are a staunch systems trader. But before you get your fingers greasy you need to do some preparation. So the first part of the book which follows is all about theory, and in the second part I explain how to use your tools safely.



  • The Flawed Human Brain
  • Systematic Trading Rules
  • Fitting
  • Portfolio Allocation
  • Framework Overview
  • Instruments
  • Forecasts
  • Combined Forecasts
  • Volatility targeting
  • Position Sizing
  • Portfolios
  • Speed and Size
  • Semi-automatic Trader
  • Asset Allocating Investor
  • Staunch Systems Trader