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Systematic Trading: A unique new method for designing trading and investing systems
This is not just another book with yet another trading system. This is a complete guide to developing your own systems to help you make and execute trading and investing decisions. It is intended for everyone who wishes to systematise their financial decision making, either completely or to some degree.
Author Robert Carver draws on financial theory, his experience managing systematic hedge fund strategies and his own in-depth research to explain why systematic trading makes sense and demonstrates how it can be done safely and profitably. Every aspect, from creating trading rules to position sizing, is thoroughly explained. The framework described here can be used with all assets, including equities, bonds, forex and commodities.
There is no magic formula that will guarantee success, but cutting out simple mistakes will improve your performance. You'll learn how to avoid common pitfalls such as over-complicating your strategy, being too optimistic about likely returns, taking excessive risks and trading too frequently.
Important features include:
- The theory behind systematic trading: why and when it works, and when it doesn't.
- Simple and effective ways to design effective strategies.
- A complete position management framework which can be adapted for your needs.
- How fully systematic traders can create or adapt trading rules to forecast prices.
- Making discretionary trading decisions within a systematic framework for position management.
- Why traditional long only investors should use systems to ensure proper diversification, and avoid costly and unnecessary portfolio churn.
- Adapting strategies depending on the cost of trading and how much capital is being used.
- Practical examples from UK, US and international markets showing how the framework can be used.
Systematic Trading is detailed, comprehensive and full of practical advice. It provides a unique new approach to system development and a must for anyone considering using systems to make some, or all, of their investment decisions.
Author Robert Carver draws on financial theory, his experience managing systematic hedge fund strategies and his own in-depth research to explain why systematic trading makes sense and demonstrates how it can be done safely and profitably. Every aspect, from creating trading rules to position sizing, is thoroughly explained. The framework described here can be used with all assets, including equities, bonds, forex and commodities.
There is no magic formula that will guarantee success, but cutting out simple mistakes will improve your performance. You'll learn how to avoid common pitfalls such as over-complicating your strategy, being too optimistic about likely returns, taking excessive risks and trading too frequently.
Important features include:
- The theory behind systematic trading: why and when it works, and when it doesn't.
- Simple and effective ways to design effective strategies.
- A complete position management framework which can be adapted for your needs.
- How fully systematic traders can create or adapt trading rules to forecast prices.
- Making discretionary trading decisions within a systematic framework for position management.
- Why traditional long only investors should use systems to ensure proper diversification, and avoid costly and unnecessary portfolio churn.
- Adapting strategies depending on the cost of trading and how much capital is being used.
- Practical examples from UK, US and international markets showing how the framework can be used.
Systematic Trading is detailed, comprehensive and full of practical advice. It provides a unique new approach to system development and a must for anyone considering using systems to make some, or all, of their investment decisions.
325 pages, Hardcover
First published September 14, 2015
199 people are currently reading
874 people want to read
About the author
Robert Carver
4 books86 followersRobert Carver is an independent systematic futures trader and investor, writer, and research consultant. He is the author of “Systematic Trading: A unique new method for designing trading and investing systems" (Harriman House, 2015), and "Smart Portfolios: A practical guide to building and maintaining intelligent investment portfolios" (Harriman House, September 2017).
Until 2013 Robert worked for AHL, a large systematic hedge fund, and part of the Man Group. He was responsible for the creation of AHL's fundamental global macro strategy, and then managed the funds multi billion dollar fixed income portfolio. Prior to that Robert worked as a research manager for CEPR, an economics think tank, and traded exotic derivatives for Barclays investment bank. He spent his early career in the Middle East.
Robert has a Bachelors degree in Economics from the University of Manchester, and a Masters degree, also in Economics, from Birkbeck College, University of London.
Robert trades and invests with his own money using the methods you can find in his books.
Until 2013 Robert worked for AHL, a large systematic hedge fund, and part of the Man Group. He was responsible for the creation of AHL's fundamental global macro strategy, and then managed the funds multi billion dollar fixed income portfolio. Prior to that Robert worked as a research manager for CEPR, an economics think tank, and traded exotic derivatives for Barclays investment bank. He spent his early career in the Middle East.
Robert has a Bachelors degree in Economics from the University of Manchester, and a Masters degree, also in Economics, from Birkbeck College, University of London.
Robert trades and invests with his own money using the methods you can find in his books.
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Displaying 1 - 12 of 12 reviews
January 8, 2017
If your financial literacy is high, you probably won't learn anything useful from this book. There are some truism that everybody knows (such as emotion hampers effective trading) and the corollary that some rule-based approach would be less subject to human emotions. But that's about it. The exact mechanism being proposed is highly debatable. The whole volatility-adjusted past performance as basis for portfolio allocation is not quite "chartism", but is not based on fundamental of the business and merely sourcing past stock performance. This, to me, is still voodooism, one step removed from the likes of Elliot wave or Fibonacci sequence.
If your financial literacy is low, then go read the classics (Intelligent investor, or better yet, Economics in one lesson).
If your financial literacy is low, then go read the classics (Intelligent investor, or better yet, Economics in one lesson).
February 22, 2017
I really like this book. It's a nice fusion of statistical tools and some well-founded scepticism about the answers those tools can give you if you apply them naively. The author's trading framework is well-motivated at every stage, and the author provides an explicit instantiation of that framework with a perfectly reasonable futures trend-following strategy.
The author's blog is a nice source of additional info about some aspects -- e.g. there is a very helpful post about position sizing for smaller account sizes.
The author's blog is a nice source of additional info about some aspects -- e.g. there is a very helpful post about position sizing for smaller account sizes.
February 11, 2023
The book is a clear description of how to build a trading system, together with motivations.
Among the perils I became aware of, from this book:
- Overfitting models. Use very simple trading rules instead, which do not have the opportunity to overfit.
- Overtrading. If you trade too often, fees will eat you alive. Include fees in your simulations and don't let your fees be a too large proportion of profits. Be skeptical about your profits.
- Oversizing bets. I came with the conception that when one sees a signal, they should go for it with the whole budget for that signal (as naïve as that sounds). My perspective shifted considerably when the author presented gradual, proportional responses to gradual indicators (rather than "events") which also take into account volatility.
If you plan getting your hands dirty with your money, this is the book for you.
My only criticism with this book is that the statistics used are Gaussian. The law of large numbers needs much larger numbers with heavier tails (as per Taleb). But there's only so much that fits in a book.
Among the perils I became aware of, from this book:
- Overfitting models. Use very simple trading rules instead, which do not have the opportunity to overfit.
- Overtrading. If you trade too often, fees will eat you alive. Include fees in your simulations and don't let your fees be a too large proportion of profits. Be skeptical about your profits.
- Oversizing bets. I came with the conception that when one sees a signal, they should go for it with the whole budget for that signal (as naïve as that sounds). My perspective shifted considerably when the author presented gradual, proportional responses to gradual indicators (rather than "events") which also take into account volatility.
If you plan getting your hands dirty with your money, this is the book for you.
My only criticism with this book is that the statistics used are Gaussian. The law of large numbers needs much larger numbers with heavier tails (as per Taleb). But there's only so much that fits in a book.
May 4, 2020
Comprehensive guide to developing and running a systematic trading strategy. Goes into technical detail, and intended for a practitioner who is interested in building systems to guide trading.
Author divides up strategies into 3 main buckets:
a) asset allocator - the passive investor who slowly rebalances
b) the semi-automatic trader - those who use discretion to enter trades, but want to size and manage position and portfolio risk systematically
c) systems trader - where every trade and decision is generated by logic embedded into a system.
The principles are straightforward, though the challenge is to then develop a) your infrastructure to implement such a system, and b) your signals to generate trading logic
This form of investing and management is very much in vogue in a computerized world. An overall excellent resource for a practitioner.
Author divides up strategies into 3 main buckets:
a) asset allocator - the passive investor who slowly rebalances
b) the semi-automatic trader - those who use discretion to enter trades, but want to size and manage position and portfolio risk systematically
c) systems trader - where every trade and decision is generated by logic embedded into a system.
The principles are straightforward, though the challenge is to then develop a) your infrastructure to implement such a system, and b) your signals to generate trading logic
This form of investing and management is very much in vogue in a computerized world. An overall excellent resource for a practitioner.
March 16, 2024
A truly excellent book for those looking to explore systematic trading, and taking e.g., trend-following to a deeper level. Most books on trend-following that focus on old-school money management techniques like trailing ATR stops, but Carver's trend-following goes deeper by incorporating the concept of signal strength, volatility scaling and including important but often overlooked aspects of trading, such as the correlations between markets (and signals) and the impact of transaction costs. Of course, it covers other macro factors such as carry, not just trend. This book is a great starting point for those looking to more modern forms of systematic global macro.
January 14, 2025
this book is a 5 star, with a caveat, you have to know some basic stuff before hand, if you are fresh then you wont get much from this, better start with the other books from the same author, like Leveraged trading or Advanced Futures trading strategies, both if them provide step to step calculations. This book is higher up, it explain the framework, how do you diversify your portflio with different risk, different cost, different asset class. It's all about risk adjusted returns. It's very very good at that. You better be a systematic/quant to get the most out of this book.
September 17, 2017
An excellent book on the practical aspects of automated trading.
Concise but packed full of tips and how to guides for anyone who wants to automate part or all of a trading system. Covers everything from start to finish.
The authors blog is also a treasure trove of applied research for anyone wanting more detail.
Highly recommended.
Concise but packed full of tips and how to guides for anyone who wants to automate part or all of a trading system. Covers everything from start to finish.
The authors blog is also a treasure trove of applied research for anyone wanting more detail.
Highly recommended.
July 18, 2023
Read this to help out my son with his internship and also out of curiosity.
It's about systems to get rid of human decisions for trading after the human decides on risk levels and instruments. Reminds me of the joke about the human, computer and the dog.
It's about systems to get rid of human decisions for trading after the human decides on risk levels and instruments. Reminds me of the joke about the human, computer and the dog.
November 15, 2017
Nothing like this one. Comprehensive book about investments systems
November 23, 2022
Some useful concepts, like volatility scaling and choice of instruments and rules based on costs. I withhold judgment on the system itself
October 28, 2024
The concept is interesting. But it is very difficult to follow. The book lacks of good examples such as mathematic calculation that shows you step by step starting from the equation.
November 16, 2025
Low quality content.
Displaying 1 - 12 of 12 reviews