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This is a discussion on my journal within the Trading Journals forums, part of the Reception category; I will comment as I read, because it's long and I would forget: Originally Posted by montmorencyt2w Hi Travis, As ...

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Old Sep 12, 2009, 1:11am   #41
 
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travis started this thread I will comment as I read, because it's long and I would forget:

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Originally Posted by montmorencyt2w View Post
Hi Travis,

As before, you yourself know the answers to your problem better than any of us here (notwithstanding all the good advice given above). The problem is putting the solutions into effect.

For example, you said that for a whole year while you were developing automated systems, you didn't try trading in a discretionary way. You clearly get a buzz from programming (can relate to that), and it might be an even bigger buzz than you get from discretionary trading (and we should return to exactly what _you_ mean by that phrase below).
I don't know how I conveyed that, but I get the biggest "buzz" from discretionary trading
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It seems to me that what you shouldn't be doing is trading, but writing systems for other people to trade, either with their own money, or (under very strict conditions, and of course, only the right people) your money.
Yeah, unfortunately just yesterday a friend whom I offered to help by giving him money to discretionary trading once he will show me he's profitable, now wants more - my money and my systems. I am kind of upset about it. That's what I get for being friendly. On the other hand, his efforts and ideas are giving me ideas for new systems, which I knew from the start would have been the case. But I hope he'll be able to learn what I couldn't learn (discretionary trading), rather than ask me to build systems for him.
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Originally Posted by montmorencyt2w View Post
In an ideal world, you would never even trade your own automated system, let along your discretionary one, so you may be able to uninstall the appropriate software from computers in your immediate vicinity, and have some distance from temptation.

I don't know how realistic this is in your particular situation, but maybe it will give you food for thought.
Yes, I thought about having my systems run on a remote server, and then connecting to it once a day.
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Originally Posted by montmorencyt2w View Post

Quite frankly, I'd be damned prouder of having successfully written an automated system that worked, than being able to trade manually day in, day out, hour after hour. Any fool can work.
Maybe like others, and definitely like myself, I tend to want what I don't have. As I said, I tend to push my limits further, by (my) nature. Even if sometimes what I am reaching is useless and doesn't interest me anymore once I reach it.
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Originally Posted by montmorencyt2w View Post

Discretionary systems: I wonder exactly what you mean by this phrase. You haven't defined it, and I don't think anyone else has asked.
I haven't defined it? No, no, I have defined it. I wrote many posts about what I mean by "discretionary methods/systems". But I thank you even for reading just one of my posts, because I don't have the patience of reading anyone's posts. What I mean is this. I believe first of all that unlike what I might have implied by quoting and agreeing with tenbobtrader and his quote of Brett (the whole talk about discretionary traders being like machines), there are no univocal rules in discretionary trading, and, by definition, there must be some part played by "discretion". Which in turn causes our inability to back-test and have future expectations based on such discretionary methods, which by the way we shouldn't even call "systems" (if I used the term "discretionary systems" I made a mistake). If a method has nothing but fixed and univocal rules and no room for discretion / intuition / instinct / improvisation / interpretation / flexibility, then that is not a "discretionary method" in my opinion.
Quote:
Originally Posted by montmorencyt2w View Post
From reading far more experienced traders than myself, I gather that they very often have strict rules, but these rules don't define every possible situation; they are just a framework. Sometimes a setup can be perfect on paper, but the experienced trader doesn't feel that it's right somehow, and passes it up. That's one example of a discretionary (non)-trade, but it doesn't mean there were no rules involved.
I hadn't read it yet, when I wrote the above, but of course I agree with you.
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Originally Posted by montmorencyt2w View Post

I think that what I am getting it is that you seem to be posing automated trading and discretionary trading as two extremes of a spectrum, and I believe that may be a false dichotomy.
Well, I don't know what dichotomy means, but if it's false, I have nothing to do with it, because I always tell the truth, even when I lie, like Tony Montana says. Now, seriously, those two things are in my opinion two extremes of a spectrum. With AT I can be at the beach all day, with DT I have to be at home all day, stressed out and on an emotional roller coaster. With AT I could let it run without looking at the markets nor making one decision for a whole week, with DT I have to make decisions and look at the markets throughout my trades.
Quote:
Originally Posted by montmorencyt2w View Post

The hardest thing to program into any system is what we normally call "common sense". That's the discretion that a human trader brings to the act of trading, or should do.
Yeah, I agree. I don't even have that common sense that I should program into my systems. And in fact my systems didn't come from my common sense, but from my interpretation of statistical data. Most of the time I wanted to build a different system, but then accepted what the data was telling me, and often built a system that was doing the opposite of what I originally had thought would work.

Last edited by travis; Sep 12, 2009 at 1:17am.
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Old Sep 12, 2009, 1:16pm   #42
 
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travis started this thread All quiet today. No trading because it's saturday. I will have to test 9 volatility breakout systems - they work. Unfortunately that friend of mine is now hoping that I will give him the systems once I automate them, just because he came up with the idea. It was his idea, yes. It took him 5 minutes to tell me. By the end of everything I'll have worked on it for 200 hours, and he wants me to deliver the systems to him. True, I am the one who told him: "You can have these systems once I'll be done, because it was your idea". But... well **** me. Now my promise is like a debt - he immediately expects me to deliver everything I ever offer (like children do), plus all the things he asks. Now it's like I'll have to work for him, implement it entirely - he knows nothing about computers, and may even have to implement new ideas he has - if he starts relying on this as a source of income. It's not enough that I offered to give him the money to start discretionary trading on his own - thanks to which proposal he started to paper trade and now he's giving me plenty of good ideas. He's an honest person, very intelligent, even though with little formal education, BUT: I don't know what I got myself into. I've known him for almost 20 years. However, I am afraid that now - he's unemployed - his family will rely on my systems for future survival - which would really really be bad. I mean - the initial proposal was "get consistently profitable with paper trading and I'll give you the money to start", and in return he would have told me what worked. Now, after paper trading for almost 2 months and reasoning with me on trading, he's more like someone who remotely thinks that if he doesn't get profitable I will still give him the money (a few thousands) AND the systems that I developed "thanks" to his ideas (which actually I could have gotten myself, but I am letting him think it's all his merit). But this is not the case. Because then he'd be relying entirely on me for the rest of his life, and then he would try to convince me to give him all my other systems to him as well. I'd have to work for him for free, after giving him my money to invest. This is totally ridiculous. I am going to write him an email stating clearly that if he doesn't get profitable, I will still give him the systems I created from his ideas, but not the money, because that was not the deal. I don't want him to rely entirely on automated trading because he knows nothing about it, and I'd end up having to work for him for free, and maybe even give him more systems. Years of work given to him for free. This is way too generous and I may even do it, but on my free will, not because you ask me repeatedly and insist, because you want it really badly. I am sorry to disappoint you and I know you need money desperately but as we say in Italy "I offered you a hand and now you're taking my arm". You're getting too needy, and I am not ok with it anymore. You either limit your expectations of me or we forget about everything. One thing is to say "you get me started, you give me the capital, and then I'm on my own", and another is "you get me started, you give me the capital, and then you keep on doing everything for me". What the hell. I feel like never offering any help to him, ever again. It's not even that fair that he comes up with an idea that he thinks might work, spends 5 minutes to tell me what it is, then I spend a whole month back-testing it and automating it, and then we split the profits 50-50. If things were so easy, all he'd have to do is get a technical analysis manual and start throwing ideas at me, until, after working my ass off, I find that one of them works, and then we split 50-50. Not fair. Nice life it would be... I might as well make an agreement with somebody so that I give him my money and he accepts it in return.
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Old Sep 12, 2009, 2:25pm   #43
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from your own profile ~

"I can't do discretionary trading also because I actually enjoy breaking rules. I go to work late, I go to bed late, I bend most social rules, being an anti-conformist. I think I'm similar to other unprofitable traders, who fail and quit. Yet, together with all my deficiencies, I have one clear quality: I am not superficial. I obsessively kept at it until I found a way to make it work.

With automated trading, the only problem is to let my system run without interfering. It was not easy, but necessary - as a discretionary trader I lost money every month for 12 years, whereas as an automated trader I made money every month ever since I started."


"Remember this: The house doesn't beat the player. It just gives him the opportunity to beat himself."
Nicholas (Nick the Greek) Dandalos


“When we play, we must realize, before anything else, that we are out to make money.”
David Sklansky


you win Travis, that all there is to it .......... nothing else

except it, go gambling small change at the track :-)

later

Andy
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Old Sep 12, 2009, 2:58pm   #44
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I thought you'd spend this weekend working on a method that would make you wealthy, but I see that you have a morality problem, as well. Remember that behind every fortune there is a moral or criminal act. I would say that there are more immoral acts than criminal ones. What you must think about is whether you have a conscience, or not. If you have, will it, always, nag at you?

In the UK, we have just had a political furor over expense accounts. The accused always fall back on the argument that "it's within the rules"

Personally, I would wonder about how good a friend your friend is. If he is a good one, he will be reasonable about your arguments and want to share. If he isn't, forget him. But you have to decide that for yourself.
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Old Sep 12, 2009, 3:47pm   #45
 
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travis started this thread Yeah, everybody makes sense here: a lot of wise people. Thank you for your comments and advice. You all make sense, what can I say. I'll keep writing to keep tracking my development, and to see if I'll start acting more in the direction of my own self-interest, without being constantly harassed by my conscience and my upbringing. Damn, am I in control, or am I just acting according to how I was planned by my parents? I want to start being in control a little more.

That friend is a friend, but when things are too unbalanced that's what happens: one asks, and the other one gives. If you have two friends, and one doesn't have financial concerns, while the other one is unemployed, with a wife and two children, and is having trouble paying his bills, it's pretty normal that he's going to try to ask for help. It's already a miracle that he never asked me for money (I offered it if he ever becomes profitable, but that was two months ago, and he's had financial problems for years).

Last edited by travis; Sep 12, 2009 at 3:53pm.
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Old Sep 12, 2009, 4:03pm   #46
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Quote:
Originally Posted by travis View Post
Yeah, everybody makes sense here: a bunch of wise people. You all make sense, what can I say. I'll keep writing to keep tracking my development, and to see if I'll start acting more in the direction of my own self-interest, without being constantly harassed by my conscience and my upbringing. Damn, am I in control, or am I just acting according to how I was planned by my parents? I want to start being in control a little more.
Unfortunately, you are going to have a job. What your parents taught you, if you were close to them, will be part of your conscience. I'm 77. That's getting on. I am still influenced by my parents and what they taught me. Sometimes I laugh and tell myself that I will never be rich! That is one of the good things about trading, you don't know who the other side is. That helps somewhat.
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Old Sep 12, 2009, 4:24pm   #47
 
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travis started this thread Tenbobtrader, the quote master. You convey much meaning by simply quoting what others say - with great precision.

Splitlink, your insight brings up psychological issues, and now philosophical: morality. But it will be a very long discussion if we get into morality.

To simplify my journal, and to come up with a few points, out of the thousands of lines I've been writing, here's another one of those recapitulations: what I want and possible solution in parentheses. I want to do these things (for which I already received a lot of advice, so thank you all):

1) Make money (solution: quit discretionary and just do automated)
2) Quit job (wait patiently till it's safe to do so)
3) Not help others so much that I feel anxious (must start saying "no" to my friend, whose expectations of me are growing out of control - reasonable since he's in dire straits)

Further details about each point:
1) Must make a habit out of not being near my computer during trading hours, and like all healthy habits it will stick to me, effortlessly, once acquired.
2) Easiest than the other two points.
3) My friend calls me and talks me into doing stuff for him, by insisting, so I must talk to him less often. I'll do that by not calling him when he asks me to call him (because naturally he never calls me, to save money - which is reasonable, too).
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Old Sep 12, 2009, 6:27pm   #48
 
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travis started this thread I just realized an interesting thing. "Quitting" has two connotations, a positive and a negative one, and they both apply to my discretionary trading.

I feel like I have to "quit" my addiction (positive connotation) to discretionary trading because it just makes me lose money. At the same time, it's not merely an addiction, as I put some brains into it over the years (which lead to my successful automated trading), and, with a good feeling of "quitting" this addiction, would also come a bad feeling of "quitting" the task/challenge before succeeding at it. Interesting, huh?

On the other hand, in trading, things are practical, and not ideal, and connotations change radically. "Cut your losses", the trading motto, encourages you to "quit" a race that you are losing, to be a "quitter". And if you don't cut your losses, you're not called "courageous" but "stupid".

Acting extremely prudent is not called "being a coward", but "good money management". And someone like me, who keeps trying to succeed at something that made him lose money for 12 years, is not "persevering" and "persistent", but rather "stubborn", "bullheaded", "rigid".

Stubborn Synonym | Synonym of Stubborn and Antonym of Stubborn at Thesaurus.com
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Old Sep 13, 2009, 7:13pm   #49
 
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travis started this thread That's it. About that friend of mine - I told him via email and sms that I am only going to do so much for him. He's just very hungry and good at talking me into doing stuff for him. All I'll have to do is not call him for a while. Besides, even if he talks me into doing stuff, I'll change my mind as soon as we hang up, so, too bad for him, but I won't be doing so much for him that I'll feel used - I am putting a stop to it.

Despite appearances, he's not using me - the simple fact is that when people are really in trouble they'll grab you and pull you underwater, too. I'll just give him as much as I feel comfortable with. And if he talks me into stuff, I'll later write him an email saying "I changed my mind as usual". Not my fault if he insists so much that each time he forces me to say yes. Obviously he wants to get rich like everyone else, and it's hard to slow him down.

I got "morality problems", just like Splitlink said... and even though I am saying "no" to my friend and "I can only do so much", deep down inside me I know that I could do more. But the discomfort for feeling used and manipulated overrides my feeling of sympathy for my friend. I mean, what the hell, I am only human and by all standards I am being generous to him, so I don't see why I should feel bad for not handing him also my work of 12 years, just because he's poorer than me. I volunteered to give him money and tools for discretionary trading, I call him when he asks me to, I assist him, and here I am - feeling bad because he's expecting more and more, and I am not feeling comfortable with it. I feel suffocated. It's more than enough to make me say "no" and if necessary to block his email. If anything, it's hard to make me do stuff. This is one good thing about being such a rebel.
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Old Sep 13, 2009, 7:48pm   #50
 
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Quote:
Originally Posted by travis View Post
That's it. About that friend of mine - I told him via email and sms that I am only going to do so much for him. He's just very hungry and good at talking me into doing stuff for him. All I'll have to do is not call him for a while. Besides, even if he talks me into doing stuff, I'll change my mind as soon as we hang up, so, too bad for him, but I won't be doing so much for him that I'll feel used - I am putting a stop to it.

Despite appearances, he's not using me - the simple fact is that when people are really in trouble they'll grab you and pull you underwater, too. I'll just give him as much as I feel comfortable with. And if he talks me into stuff, I'll later write him an email saying "I changed my mind as usual". Not my fault if he insists so much that each time he forces me to say yes. Obviously he wants to get rich like everyone else, and it's hard to slow him down.

I got "morality problems", just like Splitlink said... and even though I am saying "no" to my friend and "I can only do so much", deep down inside me I know that I could do more. But the discomfort for feeling used and manipulated overrides my feeling of sympathy for my friend. I mean, what the hell, I am only human and by all standards I am being generous to him, so I don't see why I should feel bad for not handing him also my work of 12 years, just because he's poorer than me. I volunteered to give him money and tools for discretionary trading, I call him when he asks me to, I assist him, and here I am - feeling bad because he's expecting more and more, and I am not feeling comfortable with it. I feel suffocated. It's more than enough to make me say "no" and if necessary to block his email. If anything, it's hard to make me do stuff. This is one good thing about being such a rebel.
I think individuals who trade take lots of risks; in many areas of life... Careers, relationships, monetarily - To avoid the risk becomming a reality, large quantities of hard work must be done and even then reward is a questionable outcome... Traders take huge risks; When you make it, don't consider yourself lucky or blessed - You earnt it and those that didn't don't deserve the rewards you get; Because they didn't take them risks;
They took the salary, they took the easy-job, they seeked free time... Those that trade devote themeselves 100% and the risks are massive, so you don't have to share your rewards with anyone...

If they didn't take the risks; They don't deserve it.

P.s. I'm a pretty young guy, so my life experience is limited - I was kindof just trying to portray my thoughts in that paragraph to explain to myself better how i feel about MY FRIENDS asking me to trade their money because i'm being selfish supposedly So don't take anything i say for 'serious' XD
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