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Mechanical trading vs. discretionary trading
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Mechanical trading vs. discretionary trading

  #51 (permalink)
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Lornz View Post
The winning trader "breaks" his rules at the right times...

It's funny how those trades might be the most profitable ones too....

I hope you are one of those 'winning' traders that make more money when he breaks his rules. But, for the rest of us, the market will reward the first time you break your rules, only to punish you the next 5 times you do. That's how traders develop bad habits that will ruin them. The mind has a way of suppressing the routine, and singling out the out of the ordinary, so you will remember more vividly that time you broke the rules and made money. If you believe you are one of those 'winning' traders, then by all means break the rules anytime you can, but the market will show you what kind of trader you are very quickly.

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  #52 (permalink)
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monpere View Post
I hope you are one of those 'winning' traders that make more money when he breaks his rules. But, for the rest of us, the market will reward the first time you break your rules, only to punish you the next 5 times you do. That's how traders develop bad habits that will ruin them. The mind has a way of suppressing the routine, and singling out the out of the ordinary, so you will remember more vividly that time you broke the rules and made money. If you believe you are one of those 'winning' traders, then by all means break the rules anytime you can, but the market will show you what kind of trader you are very quickly.

I believe nothing but my account statements...

As I have stated in other posts, I both have automated systems and I trade discretionary. My discretionary trades far exceeds my automated strategies. There are times when macroeconomics trumps any rules based on price action, and those moves tend to be violent...

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  #53 (permalink)
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Lornz View Post
I believe nothing but my account statements...

As I have stated in other posts, I both have automated systems and I trade discretionary. My discretionary trades far exceeds my automated strategies. There are times when macroeconomics trumps any rules based on price action, and those moves tend to be violent...

I was not singling you out personally, by 'you' I was speaking generally about all traders

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  #54 (permalink)
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Lornz View Post
I believe nothing but my account statements...

As I have stated in other posts, I both have automated systems and I trade discretionary. My discretionary trades far exceeds my automated strategies. There are times when macroeconomics trumps any rules based on price action, and those moves tend to be violent...



Hmmmm.... I dont an automated system as I cannot program worth a dam, so I wouldnt be able to be profitable without causing me more problems than doing it myself. You probably just change rules on the fly. I see one of your favorite instruments is the 6E. Do you have an example of one of these macroeconomic moves on 6E? I seem to find the 6E as the most predictable and non trend breaking instrument on the planet. In fact, I have never seen a news event turn a trend in any currency futures. Even the Japanese earthquake, I was showing a yen that had pulled back severely and was ready to explode all the way up to that day. Which still freaks me out, but that is another story... A news event may cause a 100 or 200+ pip pullback in 2 seconds, but it never turns something that isnt toppy already or vice versa. In fact, I usually can predict the reaction to news. I may have the initial reaction wrong, but because the inability of these macro events have to turn trends, usually leaves my predictions correct. I am thinking you must scalp these moves and make good money then, but for me trading with the trend seems to be a far better situation.

Not trying to argue with you at all... Profitable is profitable, and I dont care if your dog makes your trades for you. I was just wondering what you call a macroeconomic opportunity is all. I sit there everyday on Stocktwits and read the experts trying to give a reason for the move as if the news they are speaking about hasnt been known for years... Greece, Bailout, Moody's downgrade (my favorite), etc.. And since insider trading is not illegal in the currency market, I am in the camp that big money is always in the know since the political officials whose campaign was funded by these players will announce the information right after his re election's financial blood has settled in their "pre news" position. I know that last sentence ran a bit but work with me

TL;DR I dont think Macroeconomic events have any medium term or long term effects on the market. However, I do think "surprise" interest rate hikes can shift around some sentiment but they wear off too..

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  #55 (permalink)
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monpere View Post
I was not singling you out personally, by 'you' I was speaking generally about all traders

I would think that "I hope you are one of those 'winning' traders that make more money when he breaks his rules" was referring to me?

What you are saying is correct, though. But, like with other endeavors, years of experience gives one the "wisdom" to know when to improvise. It's not recommended for beginning traders.

And it's not really about "breaking rules" either, it's more about knowing which set of rules to trust.
I successfully traded stocks before I even had heard about technical analysis. Occasionally I will take trades based on other factors than price action, but I will still use a chart for stops and targets...

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  #56 (permalink)
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baruchs View Post
]
You are from the old school and I think that people like you will never have a break, because they don't have imagination and cannot invent or even adapt to the changing world.
There are traders, maybe more old school than you, who still trade with a pencil and paper. You may laugh at them, but you're exactly like them.
To your example I just want to point that airplanes are already flying on autopilot. I bet that when this was invented you gave the same statement of how ridiculous it is.
And doesn't matter what you say the cars are going in the same direction.
Now about trading this is different for now. It is still too difficult to develop adapting bots, but it will happen.
As for now there are advantages and disadvantages in each type of trading, and they were mentioned here, so try to think more progressively. I know the saying "You can't teach old dog new tricks", but in this world when you compete with new dogs you have to.

You seem to have your analogies mixed up.

A car could drive itself just as a plane could. Still - air traffic control requires humans just as driving a car in traffic does.

I don't laugh at anyone. Just that there's not a program out there that could drive a car and take in all the things a human driver could and be relied upon to make as good a decision as a human brain.

As for 'never catch a break' - why would I need to catch a break? I have tape reading skills that are the result of a lot of hard work. I am constantly improving. I am always learning new tricks. I use my brain and I know it's a fantastic tool that will do a lot of the work for you.

I've recently developed a set of tools that have not been thought of by anyone on the planet. There's a few more in the pipeline. I'm not the kind of dog that can't learn new tricks, I'm the kind of dog that invents new tricks.

You need to do a bit more research before you jump to conclusions.

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  #57 (permalink)
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monpere View Post

The problem with trading from that intangible, unidentified, ability, or skill, is that if you haven't broken down your method down to it's core, and don't know exactly the reason why it works, then when it stops working for some reason or another, then you are screwed, because you have no idea how to fix it.

This is the crux of it.

Too many think trading is a problem to be resolved and not a skill to be developed.

Those that approach it as a problem will not be developing the skill and will be screwed (your words) when the market changes.

I am amused that someone called me a 'dog who can't learn new tricks' for claiming that trading is a skill which will constantly evolve as opposed to a problem which can be programmed around.

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  #58 (permalink)
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DionysusToast View Post
This is the crux of it.

Too many think trading is a problem to be resolved and not a skill to be developed.

Those that approach it as a problem will not be developing the skill and will be screwed (your words) when the market changes.

I am amused that someone called me a 'dog who can't learn new tricks' for claiming that trading is a skill which will constantly evolve as opposed to a problem which can be programmed around.

Ok someone called me out on my lie... This is my problem... I havent figured out what it is I do exaclty. I just used the old "I cant program" excuse. I promise you I wouldnt sleep another minute until I learned how to program. And neither would any other non programmer that gives has any f'n pride in themselves or love for this, which I have too much of both I simply do not know what it si that qualifies me to break from the norm...


Last friday, after the GBPJPY had got creamed for what seems a whole week, I went long with 15 minutes left in the market day only to continue getting creamed for about 15 or so pips and held over the weekend which I try not to do, not because I am scared of weekend news or gaps since I aint no beeyoch, but because there was something somewhere that I liked. I overanalyzed it all weekend and decided that I would exit at break even or close as I could because there was nothing in my charts to say otherwise... It went up up over 1% the next 2 days and then I quit watching it. I am very logic driven.. Does anyone have any tips documenting and completely figuring out their own logic? Like it or not, 100% of our actions in the market can be programmed since our only goal should be consistency given a certain set of information... Whether you use tape reading, 1 minute rsi, or whatever... Obvious Fundamentals take about 0.0003 seconds to price in or the market is horribly inefficient and shouldnt be of any value for anything. We dont know anything that millions of others dont already know and we cant move the markets alone. So again everything we do is based off volume, support/resistance, price action, favorite indicator, candles, etc... Please help me figure me out!

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  #59 (permalink)
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DionysusToast View Post
This is the crux of it.

Too many think trading is a problem to be resolved and not a skill to be developed.
...

I like this formulation very much. That's how i look at trading and one of the reason why i decided from the start i would not try to code or tests ideas ad nauseam until the Eureka moment as trading has a lot to do with transformative learning.

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  #60 (permalink)
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By Discretionary Do you mean just trading what your gut feels on any given instant or are you referring to trading at the right spot of a setup based on technicals and previous experience? A lot of people mix these two up. Charts are a language of their own. would you rather go to a foreign country and use a translator everywhere you go or learn the language make a few mistakes and eventually become fluent? If your the type of person who will review your losses and learn from them I suggest discretion. But if your the type of person who will continue to make the same mistakes and you don't have the time to either watch the market or learn that language and need indicators, use automation.

Many people will claim not using indicators will eventually make you a dead man. I challenge anyone of these people to trade the chartgame.com from 10k to a million with no indicators. I've done it, it works. end of story.

The key is simply stay out of the market when things don't match up. This is no easy task because your main instinct while trading is to trade and make money. the job is a balancing act and why you get paid without doing any physical labor.

And, If your indeed a great programmer and thats what you love to do then pick automation. If your passion isn't trading charts manually then do the next best thing that makes you happy. I've met someone who makes a living with automation on the CL and its not even that complicated. My passion is trading manually. Everyone is different and both can profit so respect both parties.


Last edited by sidney7g; June 18th, 2011 at 11:31 AM.
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