Question 1

What is the difference between discretionary and systematic trading?

Accepted Answer

Discretionary trading means a person decides each trade in the moment using judgment and what they see. Systematic trading follows a fixed set of written rules applied the same way every time, whether a person or code runs them.

Question 2

Is systematic trading better than discretionary trading?

Accepted Answer

Neither is automatically better. Systematic trading is easier to test, review, and repeat. Discretionary trading is more flexible and can read context a rule misses. Each has real trade-offs, and many traders blend the two.

Question 3

Can a discretionary method be tested?

Accepted Answer

Only loosely. If the rules live in someone's head and change with mood, there is nothing fixed to measure. Writing the rules down is the step that makes a method testable, which is the heart of a systematic approach.