A indicator tells me if the market can be entered long or short in each particular candle and shows a signal to help calculate odds of a reverse move. Another indicator tells me the acceptable accumulation/distribution price levels within that candle.
Not very distracting... Just some little text on part of the screen. "Buy Level, Extreme Buy Level, Sell Level, etc..." About a third of candles are okay for entry or exit.
But, only about a third of pops and dips set up good enough to trade.
I guess I would say... The trade setups, price levels of entry, etc... All mechanically determined nowadays. Discretion influence comes from objective analysis of higher timeframes and the news flow/calendar. Those check out in addition to the math... Good to go!
What I was referring to was the limitations of any system...discretionary, mechanical, etc. and for that matter, the limitations of any trading edge or strategy. Every edge or method will have it's respective strengths and weaknesses.
In specific cases there were also limitations in how I could implement discretionary methods in a mechanical system.
If you can keep your wits about you while all others are losing theirs, and blaming you....The world will be yours and everything in it, what's more, you'll be a man, my son. - Kipling
Last edited by BTR411; September 2nd, 2014 at 02:06 PM.
Reason: added for clarity
The following user says Thank You to BTR411 for this post:
My goal is to make trading simple as ABC / 123. Some of you advanced guys may frown on that but I don't care. I'm in this game to make money not to be market genius. Only thing that I am focused on is knowing just enough to earn me money. I'll leave all the advanced strategies and things to the quants.
I've learned that simplicity is always best. Give me a system that has an edge and I'll make money with it.
The following 4 users say Thank You to TradersJourney for this post:
well I believe discretionary trading can give you an edge over mechanical trading, mind has the ability to adapt and see things that in the short term the system can't see. This is my opinion at least.
But the bad of a discretionary trading is that every day you have to make the day, be in good shape, have no other things scheduled except trading and in the long term this can be unsuistanaible for most of the people. Infact the most of the traders I know have stopped doing it around 40 yrs old.
So mechanical trading can help building a more solid long term plan, give you more time and the time you have can be used to develop new things.
But off course making a reliable, and solid, consistent mechanical system is a big deal... and just one or two is also not enough.
The following user says Thank You to montanajtt for this post:
I believe good trading lends itself abiding to good rules and by that definition needs to be 100% systematic whether it be manual or automated in execution.
The analogy is similar to one going through a diet or exercise program. It is going to be very hard to figure out what works and what doesn't for oneself if one doesn't follow a systematic approach. For sure markets are dynamic and certain approaches will work well and terrible in certain situations. But isn't that a trading rule by itself if one can properly define the situation?
One can develop 20 approaches to trade whatever 1 market throws at them or alternatively use 1 approach to trade 20 markets. The whole endeavor is about figuring out how to participate in good situations and stay out of bad ones whether the rules are implicit or explicitly stated. The clearer the focus the simpler the task becomes.
The following 3 users say Thank You to Ming80 for this post:
This gets to the heart of why I started this thread. For me personally I find it extremely hard to relate to those who use completely discretionary approaches because how do you track what is and isn't working? How do you ensure that you're not looking at the market through emotional goggles on a certain day and therefore are either ignoring key information, or giving other information too much importance. I need to anchor aspects of my methodology to a mechanical process / rule base otherwise I will drive myself crazy being allowed to trade multiple similar scenarios in different ways.
For me a perfect middle ground is to define the market structure in a discretionary manner to identify my areas of interest, after which my trade entry and management is mechanical.
However I keep coming back to the thought that a lot of really top traders use a completely discretionary approach, with intuition developed over thousands of hours of screen/market time.
You donít trade the markets; you only trade your beliefs about the markets.
- Van K Tharp