Discretionary or mechanical trading?

[Solas0077]

Any evidence which of the two is better?

 

[timsk]

Any evidence which of the two is better?

Hi Solas0077,
IMO, the answer to that will always come down to personal preference. The skills and personality traits of each individual trader will determine which approach will suit them best and, by implication, which approach is likely to prove the most profitable. Therefore, I don't think it's possible to say that one is 'better' than the other, just as it's not possible to say to a tennis player that a two handed backhand is 'better' than the traditional single-handed shot. I suggest you test both approaches and look at your P&L for each; that will provide all the evidence you need to determine which of the two is the best for you.
Tim.

 

[numbertea]

Hi Solas0077,
IMO, the answer to that will always come down to personal preference. The skills and personality traits of each individual trader will determine which approach will suit them best and, by implication, which approach is likely to prove the most profitable.

I couldn't agree more. Your trading has to fit your personality and lifestyle. If you can't sit at the computer waiting for a intraday trade to pop up then discretionary daytrading is probably not for you, but discretionary end of day trading might be. I am trying to fully automate intraday trading while still working a full time day job. It is a challenge but I'm making headway, just slower. I was entering market for months on a time basis with the best direction I could choose as my entry. Now after seeing the risk of that real time I have changed to mechanical entry based on my entry signals. I still exit with my own eyes on the chart but I am catagotizing the exit situations so at some time I can be fully mechanical. Mechanical trading allows me to calculate risk with greater precision than discretionary trading so I end up making more money per trade because I can maximize the number of contracts I can trade. Then it is time for tea.

Cheers

 

[new_trader]

Any evidence which of the two is better?

No, there isn’t any evidence because it is subjective. This is something you have to figure out for yourself, nobody else can answer it for you.

 

[Purple Brain]

If I could definitively mechanise all of the discretionary aspects - I would. The problem is each day I realise I know something that I didn't know I knew. Add that to the pot and carry on. But almost daily there's a new insight into what I've been doing on a discretionary basis I didn't know I was doing - both good and bad.

If the rate at which I'm discovering these things were slowing I'd likely suggest there will come a point where I know I know everything I know and I have already or am able to mechanise it. But that simply isn't my current perspective. It just goes on and on. Which is fine by me as long as the performance improves of course. And that isn't always the case either.

 

[Solas0077]

Thanks you guys for the suggestions. I am leaning towards discretionary trading because I think that trading cannot be separated from developments, news and experience, something that mechanical trading system ignore.

 

[Vasco da Banana]

It's an impossible question. Switching on or off your 'black box' is itself discretionary!

 

[random12345]

Thanks you guys for the suggestions. I am leaning towards discretionary trading because I think that trading cannot be separated from developments, news and experience, something that mechanical trading system ignore.

It is a common mistake to assume that the limitations of a mechanical system are limited to one's own ability to develop said system.

The two are not the same.

That said we discussed the pitfalls of automated trading in another thread where it was agreed that either discretionary or automated are absolutely massive endeavours to get right. Both will consume your life if you give yourself but a tiny chance of making decent money.

 

[robster970]

Discretionary is great and the best. Automated is rubbish and for people of limited intellect. My evidence for this is that my mum told me it was true.

 

[Liquid validity]

Discretionary is great and the best. Automated is rubbish and for people of limited intellect. My evidence for this is that my mum told me it was true.

lulz

 

[robster970]

lulz

I see the site has had a spring clean whilst I've been away....

 

[robster970]

Truth.

...... it was agreed that either discretionary or automated are absolutely massive endeavours to get right. Both will consume your life if you give yourself but a tiny chance of making decent money.

 

[random12345]

I see the site has had a spring clean whilst I've been away....

If you're feeling brave Rob, you could head over to the holy grail thread and try to explain what moves the markets....

 

[robster970]

If you're feeling brave Rob, you could head over to the holy grail thread and try to explain what moves the markets....

Roger. Roger. On my way.

 

[wallstreetwarrior87]

If you're feeling brave Rob, you could head over to the holy grail thread and try to explain what moves the markets....

Noooooooooo

The chances are that Rob will come up with an accurate observation/comment, and then we will have another 20 pages to go through.

Im sure you mean well but there is only so much liquidity a person can take:cheesy: