discretionary vs mechanical trading systems

bunti_k23

Well-Known Member
#1
Hey guys plz debate over discretionary trading systens and mechanical systems , i personally use discretionary sys, but it is like having more chances of analysis paralysis as i always have to do all the manual analysis e.g finding supp and resis analysing the signals frm candles and to confirm that etc etc iam using it frm couple of months and im got used to it so wat u think shd i make it mechanical or shd i continue old school method r.i.p english:D
 

bunti_k23

Well-Known Member
#2
I request all senior guyz give me sum gud advice
 

Vertigo_1985

Well-Known Member
#3
Hey guys plz debate over discretionary trading systens and mechanical systems , i personally use discretionary sys, but it is like having more chances of analysis paralysis as i always have to do all the manual analysis e.g finding supp and resis analysing the signals frm candles and to confirm that etc etc iam using it frm couple of months and im got used to it so wat u think shd i make it mechanical or shd i continue old school method r.i.p english:D
u want to code ur discretionary system rules or wanna use an entirely new mechanical system ? mechanical system also needs regular adapting, in both case you need to know about markets and master psychology.
 

bunti_k23

Well-Known Member
#4
u want to code ur discretionary system rules or wanna use an entirely new mechanical system ? mechanical system also needs regular adapting, in both case you need to know about markets and master psychology.
No i dont want new mechanical system. But is tht possible to code discretionary method , i dont think so coz there is no fixed crossover of ema or any trendline break etc...thts just my intution always whether to sit back or take a trade
 

Vertigo_1985

Well-Known Member
#6
No i dont want new mechanical system. But is tht possible to code discretionary method , i dont think so coz there is no fixed crossover of ema or any trendline break etc...thts just my intution always whether to sit back or take a trade
some aspects of your discretionary system can be coded while some may not be, you can code it to alert if it forms some particular pattern or some condition is fulfilled, depends also on how well defined rules you have.

http://traderspodcast.com/episode56/
 

bunti_k23

Well-Known Member
#7
#8
If one can stay unemotional, then a mechanical system should be a better option for the average trader. There are traders who consistently get over 175% returns following a mechanical trading system. Not that, I have already designed one and reaping the benefits. But I am working on it.

Since you asked for an opinion, my intention in adding to your thread is purely based on what I believe in, myself.

Mechanical system traders have to follow a preconceived plan without any changes or variations, control/minimize losses and take profits. The rules could be few but are constant. Advantages are that you can trade more markets compared to a discretionary trader.

A discretionary system trader on the other hand can vary his position size, rules as per the current news or events, meaning they can make better use of market information. Personally, I feel that a discretionary trader is more advanced but like I said in the beginning if a person can cut off all emotions and be disciplined to the dot while trading your plan, a mechanical trading system should be the best bet for the average Joe.

Finally, it all boils down to each trader's attitude. Guess, we all pay the tuition fees until we learn to improvise, keep learning and fine tune ourselves with whatever trading plan devised. It had to be exactly what we believe in, very personal.
 

bunti_k23

Well-Known Member
#9
If one can stay unemotional, then a mechanical system should be a better option for the average trader. There are traders who consistently get over 175% returns following a mechanical trading system. Not that, I have already designed one and reaping the benefits. But I am working on it.

Since you asked for an opinion, my intention in adding to your thread is purely based on what I believe in, myself.

Mechanical system traders have to follow a preconceived plan without any changes or variations, control/minimize losses and take profits. The rules could be few but are constant. Advantages are that you can trade more markets compared to a discretionary trader.

A discretionary system trader on the other hand can vary his position size, rules as per the current news or events, meaning they can make better use of market information. Personally, I feel that a discretionary trader is more advanced but like I said in the beginning if a person can cut off all emotions and be disciplined to the dot while trading your plan, a mechanical trading system should be the best bet for the average Joe.

Finally, it all boils down to each trader's attitude. Guess, we all pay the tuition fees until we learn to improvise, keep learning and fine tune ourselves with whatever trading plan devised. It had to be exactly what we believe in, very personal.
:clapping: tnx for the brief explanation, later i got a mechanical system based on bollinger bands simple and easy to use the concept which i understand. I made the rules for it now learning to trade the systemdisciplinee with all discipline :thumb:
 

mastermind007

Well-Known Member
#10
Just for the heck of it and for sake of debate, I'd say that all mechanical systems must have a discretionary system embedded within.

Conversely, all discretionary system run manually by a trader is just another mechanical system in which the trader is just a mechanical system's component!!!

In a well designed mechanical version, trader's ability to think/see/interfere is severely limited. In latter, most important thing that impacts profitability, the most essential trait of the trader's is to "act without thinking".

If I was going to ultimately build a mechanical system, I'd much rather have a Gigahertz computer than me doing the grunt work!!

I have developed fully automated mechanical system that is based on Gann/Fibonacci system and all I have to do was turn machine ON at 9AM and walk away. This worked nicely for 2 months but in 3 days, market asserted itself and ruthlessly trapped the system wiping out fair chunk of profits.
 
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