Learning to discretionary trade profitably

[HaloTrader]

Robster970 - I had a very similar moment in my trading in regards to indicators/price action and discretionary trading...
I knew i had the talent and skill to discretionary trade however i didn't quite know what to write for my methodology, i wasn't quite sure... I avoided writing it down so that i could allow myself to do what i want...
Monday - £5 risk, made £50
Tuesday - £15 risk, made £22
Wednesday - £15 risk, lost £15
Thursday - £15 risk, lost £75
Friday - £15 risk, lost £15

All psychology... I knew i could do it due to the first couple of days, however as soon as my first loss occured, i became very impatient, starting drawing support and resistance on lower time-frames so that i could trade sooner and get my money back... One loss lead to another - Lost 10 trades in a row. Monday morning and i was up £80... The process occured the rest of the week again...

I realised that what i was doing was through not writing my rules, i was avoiding responsability and reason and to some extent allowing myself to gamble, however with the skills i'd acquired i felt very confident in my decisions therefore i could win at this 'gambling'...
Eventually i decided to write up my actual rules, therefore it becomes less discretionary...

For example, Support and resistance only on 1hourly.
Then at the hourly support either wait for a close above and then a close below for entries (fake breakout play) ...
I was choosing my levels but i had an entry requirement... Rather than allowing myself to do what i want.

This may not be relevant to you, but i think its important for the development of discretionary trading, make sure you're not fooling yourself - You obviously have the skill. Now turn it into a business...

For instance, i have specific price action setups that i look for on the 60 minute chart, if i didn't... Well, may aswell check out 1-2-3 swing patterns on the 1-minute because i know and can do them too! May aswell check out the 5-minute and see if any breakouts are occuring etc etc etc etc

Hope this helps :S ?

 

[Black Swan]

Oh crap...

Woah..check out the huge crown on Halo Trader's profile..respect..

 

[robster970]

@Halo - I've been writing down what I do for quite some time. In a really an@l kind of way I have little 'codes' to describe entries, exits, the reasons for them and the timeframe. It's allowed me to filter on certain types of trades I've been making to understand why some things work and what about other things don't work. I also annotate what was going on in my mind when I took the trade too - subtleties like indecision, doubt, kids beating each other up, etc.

When Black Swan suggested that I'm probably getting better at a fixed system rather than becoming discretionary, he kind of hit the nail on the head really. My 'discretion' is really just about whether I am entering a high probability set-up in a certain timeframe, using a certain criteria (breakouts, reversals or swing) and exiting using quite disciplined reasons for a profit take.

I think what became 'discretion' for me was the ability to choose and adapt based upon recognising what state the market is in rather than some sense of predicting the future and acting upon it without sound reasons. This was coupled with suddenly understanding what was going on in a holistic sense and being able to interpret it correctly in the most part.

So is this mechanical or discretion? I suppose it depends on where you are in the traders evolutionary scale. Where am I? Still simian but I've figured out how to use tools.

In my opening post, I was being serious about this site. You get useful stuff thrown at you, encouragement and even the sarcasm if you're prepared to ignore it's element of derision. It often indicates some aspect you haven't considered.

So roll on the help, humour, support and jibes. It's all useful.

 

[montmorencyt2w]

In my opening post, I was being serious about this site. You get useful stuff thrown at you, encouragement and even the sarcasm if you're prepared to ignore it's element of derision. It often indicates some aspect you haven't considered.

So roll on the help, humour, support and jibes. It's all useful.

Robster, if it is all useful, you may care to look here:

Future Perfect - is it its or it's? - grammar and communications hints and tips


Slightly tongue in cheek, as we all slip into it, although there are some who really do not know the difference.

 

[robster970]

It's possessive - LOL. Good spot. Didn't need the link. Unfortunately most people do now.

 

[Paul71]

One lose and one scratch today. Knocked on the head to go to kids sports day this aft. I think I'm a long way off sliced bread...............

Never a loss mate, never a loss. Guage the market, Rob. Trying to pin the market down in an absolute fashion will drive you up the wall. The market will always give itself away in the end, this is an absolute.




Paul.

 

[Paul71]

One lose and one scratch today. Knocked on the head to go to kids sports day this aft. I think I'm a long way off sliced bread...............

I've got two lads, one is six and a half, the other is nearly two. The market and is full of d!ckheads and w*nkers who want your money, your kids money.

You will never be the richest man on earth, and probably never be the best trader on this planet. But what you can do, is take advantage of the people who are forced into making decisions.



Good trading, Rob.



Paul.

 

[maxima]

When Black Swan suggested that I'm probably getting better at a fixed system rather than becoming discretionary, he kind of hit the nail on the head really...So is this mechanical or discretion?

If you to become a successfull trader for life it doesnt matter if other kids on the block approves you.

Trade what you are.

I also would like to say is that discrtionary trading IMO is a direct analogue of flying military jet. However long and successfull you are in this your chances to die doesnt get any smaller (after first year or two) and are very high.

 

[normbeef]

Robster... this is a good thread, you sound like you are having that "penny drop" moment... that you are finally working out what the game is all about... which is brilliant news for you...

If I could, I would like to warn you about the 18 months blow up theory you were talking about...
i would ignore this "urban legend" in the same way as you should ignore all of the other things that people say.. like "95% of people loose" etc etc... if you really believe this or become unconciously aware of it then there is a good possibility of you making it happen even though it does not really exist...

Forget it now... it B*llsh*t there is no foundation to it... put it out of your mind and get on with making money...

Good luck...

 

[tenbobtrader]

If you to become a successfull trader for life it doesnt matter if other kids on the block approves you.

Trade what you are.

I also would like to say is that discrtionary trading IMO is a direct analogue of flying military jet. However long and successfull you are in this your chances to die doesnt get any smaller (after first year or two) and are very high.

good post


think the constant decision making probably increase the chances depending on an individuals make up

 

[robster970]

I'm really enjoying myself at the moment and finding out what I do well and what I don't do so well.

In no particular order

I get complacement after a run of wins and make hasty entry decisions that backfire.
After I lose a couple I get really zoned in and trade well.
It's hard not to feel a bit crap after a bad day.
Revenge trading is really easy to do and monumentally bad for you.
I'm generally better on S&P 500 than I am on FTSE
I trade better in the afternoon/evening session. Most of my losses are in the morning.
I'm starting to realise my own subconcious limitations and how they are affecting my trading.
I shouldn't care about the trades, it should be mechanical and cold, but I do.

Hard game this. Long way to go.