What is a systematic account?

Author: Matthew Bacon-Hall | Category: Education

What does it mean when someone talks about a systematic account?

Systematic,otherwise known as model accounts, are basically automated traded concepts which are employed by many funds and CTA's
The trading ideas are coded ( they are full of techies) and are triggered when the market meets certain criteria.
They often employ breakout strategies (typically previous highs and lows) and tend to be clustered together.
Having worked for a CTA and also having watched orders for various funds in my banking days, it is common to see orders clustered at very similar levels
A typical CTA order would read as follows " Sell  50 million AUD USD at 0.7330 stop loss entry, if done buy 50 million AUDUSD a 0.7390 stop loss or 7210 take profit"

So why do funds employ coded strategies?
 Mainly because they promote consistency in trading and are seen as robust and reliable.Asset allocators like to see a coded systematic approach when they invest in funds. 
By continuing to browse our site you agree to our use of cookies, revised Privacy Notice and Terms of Service. More information about cookiesClose