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Rasco

System trading vs discretional trading

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I day trade the S&P emini's mechanically.

 

Is hard for me to be consistence day trading discretional, so, after testing a lot of mechanical ideas and no one is really reliable I don?t know if day trading is REAL.

 

Has anyone read or know or has some good advise for me?

 

Any views on mechanical trading vs discretional trading?

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The problem with most trading systems are that they are trend following systems. The markets trend 30% of the time compared to 70% in a bracket. Thus, systems can produce false signals of a trend development and instead the market can reverse. In discretional trading, you are able to point out retracements (short squeezes for example) which may or may not fuel a new trend. In mechanical trading, it is alot harder to define a new trend from just a retracement.

 

I trade 100% discretional relying on proven setups that I have crafted over the years. To me pure information is the ability to read tape, price patterns, and market profile. I can not quite rely on signals and technical indicators.

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To be a real success at trading, you need to do more discretional trading than system trading. A big part of the success of being a trader is being able to read markets, stocks, situations, etc.

 

The main positive of system trading is the fact that if enough people use the system, they can sometimes be self-fulfilling prophecies. But I would not bank on it !!

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Discretional Trading is what seperates a good trader from the rest. A feel for the markets, an eye for a trade, all of these come into play.

 

System Trading can be useful and very profitable although in the past I always found myself adapting my "system" as I went on. Thats the problem with systems, you always feel you can improve them.

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  Trade Up said:
Discretional Trading is what seperates a good trader from the rest. A feel for the markets, an eye for a trade, all of these come into play.

 

System Trading can be useful and very profitable although in the past I always found myself adapting my "system" as I went on. Thats the problem with systems, you always feel you can improve them.

 

Well said. Traders with a good feel of the markets will always be above other traders who rely on signals but never have a feel for the markets.

 

A batter with a good eye for the ball is a much better player than a .250 slugger. Just read Money Ball.

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What kind of trading system( non automatic) do you guys recomend for somone papertrading and getting familuar with?

 

I like using sma's in a manor that when the lines cross they give buys and sells but have a lot of whipsaws.

 

I get the stocks from a oversold scan type filter.

 

 

chris

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  jacobnbr1 said:
What kind of trading system( non automatic) do you guys recomend for somone papertrading and getting familuar with?

 

I like using sma's in a manor that when the lines cross they give buys and sells but have a lot of whipsaws.

 

I get the stocks from a oversold scan type filter.

 

 

chris

 

You know moving average crosses only work in a trending market which is 30% of the time. You will get CHOPPED around majority of the time. Not a good strategy to live by. You should apply different strategies under different market conditions. I also don't think in terms of oversold or overbought. Better to think in terms of supply vs demand or price rejecton vs price acceptance.

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