The New Sell and Sell Short: How to Take Profits, Cut Losses, and Benefit from Price Declines, Expanded Second Edition

Question 7—System vs. Discretionary Trading

Answer 3 Selection “A greater degree of freedom” is incorrect.

System traders who have done a lot of backtesting can have a fairly high level of confidence knowing what profits or losses to expect down the road. If they have the discipline to follow all the signals of their system, they will lower their stress level, insulating themselves to a degree from uncertainty in the markets. What they give up is the freedom to make decisions as market conditions change, creating new threats or opportunities.