The simplest of them is in abusing the very term "system.
" This term implies, or at least that is how it is understood by people serious about developing trading systems, that a trading method or strategy (these terms are pretty much interchangeable and are used that way in this article) we call the system has been systematically examined, usually over a period of several months, at the very least, and that a respectable statistics has been generated to demonstrate the trading strategy in question effectiveness or potential profitability if used for trading.
To do so in a way that can be acceptable, one should insist that the strategy that one tries elevate to the status of the trading system is objective, meaning that it can be executed in the same, at least in principle, way by all traders using it.
In other words, no trader's discretion (or extra skill) should be required to trade it properly and successfully.
Now, if the strategy is discretionary and hence its results depend on the trader's skill, it obviously cannot be objective.
Because of that examining it in the way that does not raise objections (or gives rise) to possible abuses of manipulating the data to produce the best results is very hard if not impossible.
And if this cannot be done objectively, you are likely to end up with systemic biases.
It is a very poor reason to call something a "system" just because it is likely to have systemic errors.
It is actually a very good reason not call something like that a "system".
Unfortunately, the very term "system," the very concept of the system, seem to imply the picture of superiority and completeness than its poor cousins ("strategy" and "method") just sadly cannot even begin to muster.
It is largely for this reason, or so I suspect, that the term "system" is much more preferred by various marketing hacks masquerading as "system developers.
" It simply seems so much more glamorous and inspiring so much more confidence than similar terms that should be used instead and that are much more appropriate too.
The trading system, whether it is a stock or Forex or futures trading system, should be objective.
If it is not, the person marketing it cannot be taken seriously as a developer and is better to be avoided.
Why would you want to deal with someone who either has no clue what the proper trading system is, or, even worse, he does and deliberately calls it a "system" even though that term should be reserved for something else? The proper, legitimate, term in a case like that is "trading strategy" or "trading method.
" There is nothing wrong with these terms at all.
There is plenty of room for strategies or methods in trading that have not been systematically examined for their best, most effective use requires relying on trader's discretion just as there is nothing wrong with the said discretion.
It's just another approach to trading as valid as the approach based on objective systems.