What is a trading system?
A trading system is a tool used by traders that uses objective entry and exit criteria based on parameters that have been determined by historical testing on quantifiable data. Systems are run on computers or servers and linked to an exchange for trading. Developers will send systems revisions (updates) as they see fit.
Why should I trade a system?
Trading the futures markets using a trading system provides the discipline to overcome the fear and greed that in many cases paralyzes a trader and prevent making timely decisions. Each order placed is governed by a pre-determined set of rules that does not deviate based on anything other than market action.
What should I consider?
Like all kinds of tools, trading systems if not used properly, can be dangerous to the trader’s economic health. The trader should evaluate tolerance to high-risk futures trading, risk capital and the ability to withstand equity draw-down as well as the cost in terms of both time and money to trade in the futures markets.
How do I know if the system is any good?
One of the key elements of a trading system is the ability for a trading system to hold up over time. We encourage clients to take their time and study results before they open a trading account. The only true test of a system is to see how it performs in actual trading where market slippage and trading cost are a part of the record.
How much money do I need?
The minimum deposit to open a futures trading account varies by the broker. In addition, the prospective trader should only consider opening a futures account when the trader has sufficient risk capital, due to the leverage in futures trading.
How do I get started?
The first step is for the trader to talk to a BCG consultant in order to understand the risk as well as the rewards of futures trading using trading systems. If the trader is comfortable with the program then the next step is to open a trading account and select the trading system(s) that best fit the trader’s personal risk tolerances and trading objectives. If the trader is not comfortable in operating the selected trading system(s), the trading system(s) will be “auto-traded” in the traders account for the traders benefit. The group executing the systems is not permitted to trade futures, so our focus is always on providing the trader the very best service.
What are the Risks?
Any one system may be subject to market specific, system specific, or complex specific risk. By trading multiple systems across different markets, one may reduce market specific and complex specific risk. By trading systems with different entry and exit strategies, the trader may reduce system specific risk. However, the risk of trading can be substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance is not necessarily indicative of future results.