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  #136 (permalink)

Bala, PA, USA
Trading Experience: Intermediate
Platform: NinjaTrader
Broker/Data: Mirus, IB
Favorite Futures: SPY, Oil, Euro
monpere's Avatar
Posts: 1,858 since Jul 2010
Thanks: 300 given, 3,321 received

iTrade2golf View Post
I would like to put in a little thought into this conversation.

Firstly being a discretionary trader does not mean Zen or Buddhism, it is merely someone who analyzes the current market conditions and trades accordingly...ie a trader who only takes Long positions when price is above the 200 period MA

A pure mechanical trader is someone who will trade the setup with no regards to others indicators. A discretionary trader is also a mechanical trader, if you are not then you are simply speculating and that is dangerous in this game.

A discretionary trader can choose to do a counter trend trade from a sloppy double top / Stochastic Divergence.

I will say this also, a beginning trader who is learning this craft needs to pick a setup and learn it so it is automatic and be able to trade if even if they are on the phone ordering pizza.

You will no be successful in this game if you are trying to learn every possible setup and you are trying to get every move out of a market. Learn to be pleased with consistent disciplined trades/profits and then you can call yourself a trader, until then you are a student.

This game is played from the neck up....

Agreed, I think we are saying the same thing. The only thing is a mechanical trader will not take a sloppy double top divergence, unless he has a heading in his trading plan that says "ES 5 Minute Sloppy Double Top Divergence Entry, 51% Win Ratio @ 2:1 reward/risk: Enter short when...".

Anything that has not been verified historically to have an edge, and defined specifically how to be traded, is just plain out of the question. Why? That would be adding uncalculated risk to the method, if you haven't calculated your risk, you are gambling, whether you realize it or not, whether you understand it or not, whether you admit it or not. Maybe you are a good gambler, maybe you are not. Unfortunately, 95% generally find out they are not. I didn't like those odds, so I chose an approach that calculates my odds ahead of time, and will generally keep my performance close to those stats, by defining a trading process that is precise, measurable, and repeatable.

Last edited by monpere; July 20th, 2011 at 11:34 PM.
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