Chapter 22. System Design and Testing
Chapter Objectives
By the end of this chapter, you should be familiar with
• The importance of using a system for trading or investing
• The difference between a discretionary and a nondiscretionary system
• The mindset and discipline required to develop and trade with a system
• The basic procedures for designing a system
• The role that risk management plays in system design
• How to test a system
• Standard measures of system profitability and risk
Chapter Summary
Why Are Systems Necessary?
A system aids the investor in using well-controlled entries and exits, especially those that limit the amount of loss that can occur and that will react to changing conditions in the market. A discretionary system
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