There are three primary benefits to using trading systems:

1. They save time and reduce workload.

In my early years of trading individual stocks, I spend hours every night pouring over stock charts and financial statements, trying to find the stocks that I thought had the best chance of moving up in the near term. I do enjoy looking at stock charts, and I learned a great deal about reading them during that time. But it was a huge amount of work, and took a great deal of my time.

The time and work spent with trading systems is spent up-front, in the system design process. It does take a significant amount of work designing and testing a system to the point that a trader can feel confident about its robustness. However, once the system is completed and tested, the implementation of trades is quick and easy. It literally takes me 15 minutes or less each morning to receive my signals and place my trades.

2. They eliminate the second-guessing.

With robust trading systems, you no longer have to wonder whether or not you picked the right stocks. The system picks them for you. Of course, there are losing trades along the way. There always are, regardless. Losing trades are the cost of doing business.

In the past, I did not have a set procedure for selling. And because of this I often agonized over when I should sell. Invariably, this led to doubting my choice of the stock to begin with. I wondered why the stock lost money for me, but ended up advancing 100, 200%, even 300% or more over the next few weeks or months.

Trading systems give you the whole package: what to buy, and when; when to sell; and how many stocks to own. I know now that I was picking good stocks in the past. I just didn’t have the confidence of knowing what to do with them once I purchased them. I now have a complete system to guide me. And I have no reason to second-guess my trades, as long as I execute the trades per the system parameters.

3. They give a good benchmark for checking your results

Markets go up and down. And every trader experiences losing streaks. Long losing streaks can shake a trader’s confidence, causing him/her to begin doubting. Without a benchmark, a trader cannot get a good perspective on the performance of his/her trades, and whether or not the winning trades will return.

A system gives you a history, or a benchmark, to compare your current results to. You can immediately see that the system has endured losing streaks and drawdowns in the past, and has always rebounded. As long as your current losing streak compares well to previous streaks, and you are correctly following the system's signals, you know that the winning trades will, indeed, return.

And of course, when you are in the midst of a winning streak, you can know with confidence that profits will continue into the future, because the system is working like a fine-tuned machine.

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