Master one trick only

[avny]

Discretionary or System Trading
http://daytrading.about.com/od/daytradingbasics/a/DiscretionSyste.htm

One of the choices that every new trader has to make, is whether to be a discretionary trader or a system trader. Discretionary trading is decision based trading (i.e. the trader decides which trades to make), and system trading is rule based trading (i.e. the trading system decides which trades to make). Both discretionary trading and system trading have the potential to be equally as profitable, so the decision should be made based upon the personality of the trader. Some traders will instantly be able to recognize which type of trading is more suitable for them, while other traders may need to experience both types of trading before they can make a decision.

Discretionary Trading

Discretionary trading is decision based trading, where the trader decides which trades to make, based upon the information available at the time. A discretionary trader may still follow a trading system with clearly defined trading rules, but will use their discretion (hence the name discretionary trading) to decide whether or not to actually make each trade. For example, a discretionary trader might review their charts and find that all of their criteria for a long trade have been met, but decline to make the trade simply because they believe that the price is too high.

System Trading

System trading is rule based trading, where the decision to make a trade is based entirely upon the trading system (hence the name system trading). System trading decisions are absolute (if the criteria are met, the trade is made no matter what), and do not offer the opportunity to decline to make a trade based upon the trader's discretion. For example, a system trader might review their charts and find that their trading system's requirements for a short trade have been met, so they will make the trade without any further decision making process (e.g. regardless of whether they like the price or not).
As system trading decisions are absolute, system trading is perfectly suitable for fully automated trading. Once a computer program has been developed to recognise when a trading system's requirements have been met, the program can make the trade (including the entry, management, and exit) without any involvement of the trader. There are various trading and charting software that provides the ability for automated trading,

Are You a Discretionary or System Trader?

Discretionary trading and system trading have the same goal (making profitable trades), and may even make many of the same trades, but they are better suited to different trading personalities.

Discretionary trading is most compatible with traders that want to be in control of every trading decision (the entry, every aspect of the management, and the exit). Discretionary traders often feel uncomfortable when they think about giving complete control of their trading to a computer program. Discretionary traders often have backgrounds in artistic endeavours, such as writing and gardening. However, discretionary trading also appeals to traders with controlling personalities, and those who like to be in control in most aspects of their life.

System trading on the other hand, is most compatible with traders who want qualities like speed, precision, and accuracy in their trading. System traders have no qualms about letting a computer program make their trading decisions, and may even value the feeling of lessened responsibility that this allows. System traders usually have logical personalities, and often have backgrounds in areas such as computer programming and mathematics.

Combining Discretionary and System Trading

It is possible to be a discretionary trader that uses system trading, but it is not possible to be a system trader that uses discretionary trading. For example, a discretionary trader may follow a trading system for their entries and take every trade that the system identifies, but then manage and exit their trades using their discretion. A system trader does not have this option, because they must follow their trading system exactly. If a system trader ever deviates from their trading system (even for a single trade), then they have become a discretionary trader rather than a system trader.

 

[avny]

Trading and Intuition
http://daytrading.about.com/od/tradingpsychology/a/Intuition.htm

I was once asked by a trader how they could determine if a market was moving decisively (i.e. was moving in a single direction), and my answer was that if they were not sure, then the market was not moving decisively. In other words, if they looked at a chart and they didn't immediately know which direction the market is moving, then it was not moving in a single direction.

Intuition and Instincts

I was suggesting to the trader that they use their intuition and instincts in deciding if the market was moving as they required, rather than a fixed measurement (e.g. an indicator being above or below a particular level). Intuition and instincts either play an important role in trading, or they play no role at all. This is because they apply differently to discretionary and system trading.

Discretionary Trading

Discretionary traders can (and very often do) use their intuition to confirm (or negate) their trading decisions. For example, a trader might decide not to make a trade because the trade would require a slightly larger stop loss than usual, even though all of their entry requirements had been met.

While discretionary traders are able to use their intuition and instincts in their trading, they need to make sure that they do not confuse them with fear and greed. For example, whenever a trader decides not to enter a trade based upon their intuition or instincts, they need to know why they are doing do, otherwise it is possible that the decision is based upon fear of a losing trade. Similary, if a trader decides to hold a trade longer than usual, they need to make sure that it is their intuition rather than greed that is making the decision.

Knowing the difference between intuition and emotions is something that will come with experience. In the meantime, if you are making a trading decision and you find that your heart is racing or that you are starting to sweat, you are probably making an emotional rather than an intuitive decision.

System Trading

System traders on the other hand, cannot use their intuition in their decision making process. System traders make their trading decisions during their testing and analysis of their trading system, rather than during live trading. If a system trader starts using their intuition and instincts to modify their trading decisions, they are no longer a system trader, and they may need to modify other aspects of their trading accordingly (i.e. there is no such thing as a part discretionary and part system trader).

 

[worthless]

Hi avny,
I am somewhat ok with my entries after learning from you. Still having a lot of problems with exiting at the right time. So reviewing your charts this weekend...On Jan 6th, at pink line we have day's low, but you did not exit fully there. I realise you are only holding partial position, but price could have reversed fully from there. Please can you share your thought process at that point? What is it that you are seeing on the chart at that point in time? Thanks for your help.

 

[avny]

http://daytrading.about.com/od/daytradingbasics/qt/TradeYourOwnCharts.htm
Trade Your Own Charts
By Adam Milton

Trading is usually a solitary activity, but sometimes traders will trade in pairs or groups, sometimes traders will look at other traders charts, and sometimes traders will share trading suggestions with other traders. These are all perfectly acceptable things to do, as long as they are done correctly (which as you can guess, is often not the case).

Trading Charts

In theory, a trading chart of the same market, that is using the same time frame, and the same indicators, should look exactly the same for every trader, but this is not the case. For example, different brokerages provide the same market data slightly differently, which can lead to different market prices at different times. Variations in the time of each trader's computers can lead to price bars (or candlesticks) opening and closing at slightly different times, which can cause price charts to look quite different.

These things might appear easy enough to overcome, but when a trader is trying to make a trading decision, and they are presented with conflicting information, their decision becomes very difficult indeed (if not impossible).

Decision Making

Solitary traders obviously have to make their own decisions. They have to perform their own market analysis, and then decide every aspect of their trades themselves (i.e. entry, management, and exit). Traders that trade in pairs or groups on the other hand, can in theory make their decisions together. They can look at each other charts, and discuss potential trades either in general or very specifically (i.e. exact prices). However, in reality this type of pair or group decision making would be a mistake.

Even if trading itself can be performed in pairs or groups (i.e. for company), trading decision making is not a group activity. There are several potential pitfalls of attempting to make trading decisions as a pair or group, with one of the most likely being complete indecision. Different traders have varying levels of knowledge, experience, and ability, and therefore they can have very different views of the same market.

Trade Your Own Charts

So, trade your own charts means quite literally, make your trading decisions using only your own charts, and it also means, make your own trading decisions without any input from any other traders. This would appear to be easy enough, but it can be very difficult to make an independent decision when the trader next to you is essentially telling you that you might be wrong. For example, if you have decided not to make a particular trade, but you know of another trader that has made the trade, and the trade makes a substantial profit, are you honestly going to have the will power to decide not to make the next trade that the other trader makes?

Note that there is one exception to trading your own charts, and that is when you are a beginning (or still amateur) trader, and you have specifically asked a professional trader to provide you with trading suggestions (e.g. by subscribing to a professional trader's trading service). In this case, you would not actually be making any decisions at all (even though you might be looking at your own charts), so it is then acceptable to make your trades without trading your own charts.

 

[avny]

Hi avny,
I am somewhat ok with my entries after learning from you. Still having a lot of problems with exiting at the right time. So reviewing your charts this weekend...On Jan 6th, at pink line we have day's low, but you did not exit fully there. I realise you are only holding partial position, but price could have reversed fully from there. Please can you share your thought process at that point? What is it that you are seeing on the chart at that point in time? Thanks for your help.

dear Worthless,

there are no fixed rules,and can not be made for every situation,
we take decision,as per our knowledge and our assessment of situation at that particular time,and it is possible that in the same situation,next time,the decision may be little different than the earlier one
in the above chart ,when the price start reversing from the day's low,there were two possibilities,either it will reverse from here completely or it will be a pull back and price will resume it's down trend(which was a good possibility,by seeing the earlier move )
so i have to choose,which one i follow,and i took the 2nd one,giving the more weightage to prior move of price
and what i will loose if my decision went wrong,
nothing,because i already booked half
but the 1st choice was also good,because if exited there,than there was some extra profit and another chance to go short again,
so next time i may opt for 1st option

so there is no absolute right or wrong decision/time

it is how we assess the situation at that particular time

it is also how we handle the trade after entry/partial exit,that matters

thanks

 

[avny]

TODAY'S TRADES

1: sold as BOF ,but price did not went down,instead started making HL ,SL triggered at point A

2: reversed at point 2,as BPB setup formed
trailed with TSL and exit half at point A,

price than entered into sideways move and as per my earlier observation,price should give a B/O above this range,so looked for long at lower range,but did not get a suitable entry set up,
so went long at point 3 as BPB setup formed
exit half at point C and rest at point D

 

[avny]

Dear all,

this is my last post in TJ,
due to some personnal commitments,i am unable to continue here
moreover i think i do not have anything new to share with you all

it was a fruitful journey for me,since i started here on 27 aug 2013
initially i wanted to contribute something to a forum,from where i got so many things
but as it turned out,i was giving more to myself,by doing so.
earlier i was very irregular about,self reviews
but when i started posting my trades here,than it became a daily routine for me
and it helped me a lot,to find my faults,improve my method and many new opportunities
were came to me,which i was unable to see earlier
to add, there were questions and doubts raised by fellow traders,which helped me to furthur improve my knowledge
being in a teaching profession,though for a very short period,i knew it well that " teaching is the best way of learning"
though i was not, like, teaching anything here,only sharing my ideas,but the result was the same for me

from here on, i want one of you to take over and start posting your charts and trades,do it for
some times and see the results

lastly,,thanks to all,who shared this thread,posted their views and cheered me up

and i apologise if anyone got hurt,by my any of my posts

wish you all a very successful trading carrier

PS: i will try to rejoin,once my commitments are over

 

[maneverfix]

Unfortunately every good thing has to last someday. All the best for future.

dear all,

this is my last post in tj,
due to some personnal commitments,i am unable to continue here
moreover i think i do not have anything new to share with you all

it was a fruitful journey for me,since i started here on 27 aug 2013
initially i wanted to contribute something to a forum,from where i got so many things
but as it turned out,i was giving more to myself,by doing so.
Earlier i was very irregular about,self reviews
but when i started posting my trades here,than it became a daily routine for me
and it helped me a lot,to find my faults,improve my method and many new opportunities
were came to me,which i was unable to see earlier
to add, there were questions and doubts raised by fellow traders,which helped me to furthur improve my knowledge
being in a teaching profession,though for a very short period,i knew it well that " teaching is the best way of learning"
though i was not, like, teaching anything here,only sharing my ideas,but the result was the same for me

from here on, i want one of you to take over and start posting your charts and trades,do it for
some times and see the results

lastly,,thanks to all,who shared this thread,posted their views and cheered me up

and i apologise if anyone got hurt,by my any of my posts

wish you all a very successful trading carrier

ps: I will try to rejoin,once my commitments are over

 

[Somatung]

Dear all,

this is my last post in TJ,
due to some personnal commitments,i am unable to continue here
moreover i think i do not have anything new to share with you all

it was a fruitful journey for me,since i started here on 27 aug 2013
initially i wanted to contribute something to a forum,from where i got so many things
but as it turned out,i was giving more to myself,by doing so.
earlier i was very irregular about,self reviews
but when i started posting my trades here,than it became a daily routine for me
and it helped me a lot,to find my faults,improve my method and many new opportunities
were came to me,which i was unable to see earlier
to add, there were questions and doubts raised by fellow traders,which helped me to furthur improve my knowledge
being in a teaching profession,though for a very short period,i knew it well that " teaching is the best way of learning"
though i was not, like, teaching anything here,only sharing my ideas,but the result was the same for me

from here on, i want one of you to take over and start posting your charts and trades,do it for
some times and see the results

lastly,,thanks to all,who shared this thread,posted their views and cheered me up

and i apologise if anyone got hurt,by my any of my posts

wish you all a very successful trading carrier

PS: i will try to rejoin,once my commitments are over

Sir Avny

You did incredible well. All respect goes to you. :thumb: If you feel that you gave more to your self, you have given your self a huge: Thank you that I done this. Thank you that I took the time to do all this work. I only ask you: What do you want more. That is the best you could get by doing what you did. :clapping::clap: I still hope to see you some times around and do some kind of posts in other threads. :clapping::clapping:

 

[manishchan]

Anvy bhai.. what can I say.. It's so sad to see you go. In fact, I wait for your post everyday in the evening. Learnt great stuff from you which opened a new path for the way I traded. I wish you all the best for your next thing in line. May God bless you and I wish to have your occasional appearance.. at least.