as a discretionary trader for 18 years in FX, options, and stocks my edge is position sizing based on my confidence level for that particular trade. that confidence level, whether you call it intuition or something else, is achieved from many hours spent each day maintaining a feel for the markets i am trading. there are so many variables constantly at play affecting to some degree the possible outcomes of the trade that each person is literally using everything they have experienced as a child, in school, in university, in relationships, in their personal financial situation, in what they heard on the news this morning, etc to make decisions every second that your particular market is open. i have a had several traders sit beside me for months at a time, trade the same things i was trading, and not be able to make 10% of what i was making. after analyzing what was leading to the variance it basically came down to the fact that they were trying to copy what i was doing in the particular trades but were not copying what i was doing to make the decision to take the trade; the hours before and after market doing research and analysis which inevitably lead to that instinctive decision of what, when and how much of a particular market to trade. over the years i have automated some strategies which are pure mathematical edges but during market hours my trading is done without charts and indicators but with lots of market breadth info, global indexes, and futures market data that assist the mental charts in my head of what the action of the things i am trading that day look like. discretionary trading works for me. mechanical trading may work for me in the future when trading platforms are capable of digesting everything my brain is able to and simultaneously execute trades similar to those i would have executed myself.
Can completely discretionary traders every succeed?
- Thread starter kiwi_trader
- Start date
I think the answer is yes. Call Stevie Cohen.
are you kidding?
Good to see at least one more person figured it out. :eek:
Seriously, its hard to change the mindset of discretionary traders because there are always these groups of people that are the BEST supporter of ruleless, seat-of-the-pants, discretionary trading:
1. People who trade rarely, has no knowledge of mathematics and has no contact with a backtesting software in their life. (custom made or otherwise)
These people make 20 trades within 1-2 years and claim discretionary "market sense" must work because all the books say so. lol.
2. People who are "fooled by randomness". They are in the black in their trading and so claim whatever they're doing works. I know one guy who did 24 trades in 1 year, made 30% and start dreaming about millions while proclaiming his system is "proven".
3. People who trade 100-300+ trades a year but still claims it works even though they're not making any money. This group are a mystery to me, I can't figure them out.
4. People who don't trade but read a lot of get rich quick books and think by ramming as many indicators as possible on the chart while having "market sense" will help them predict price. I met lots of highschoolers and college students like this.
Hey... just a minute. I have over 20 indicators on each of my charts, under my charts, over my charts, behind my charts, on top of my charts, and in front of my charts. I can't even see price anymore. In fact, I haven't even seen price for over 2 years. I forget what it even looks like. I just trade the indicators. Is price still there?...
Without all of these indicators, I would have no idea what price was doing...
Quote from version77:
Hey... just a minute. I have over 20 indicators on each of my charts, under my charts, over my charts, behind my charts, on top of my charts, and in front of my charts. I can't even see price anymore. In fact, I haven't even seen price for over 2 years. I forget what it even looks like. I just trade the indicators. Is price still there?...
Without all of these indicators, I would have no idea what price was doing...
lol. is that sarcasm or the truth? :eek:
the funniest incident i encountered regarding this was when a college student who is a member of his college's trading/investment club told me "indicators help you aim better. the more you have, the more accurate your aim will be" when i asked him what kind of edge he thinks he have using Stochastics, RSI, MACD, MA, ADX etc when trying to predict where the stocks will go.
so according to him, if enough indicators are lumped together we'll be able to predict price moves with 100% accuracy.
Got an image in my head of triple screens of indicators, tracking one price chart alone 
Quote from jorgeamado88:
Got an image in my head of triple screens of indicators, tracking one price chart alone
Oh my gosh. How did you know my setup? I have just one chart
spread across all 3 of my monitors and I still cannot see price at all.
I got this wonderfull idea from Woodie. He says you do not need
price to trade so he must be right. So I covered up price with at least
10 different settings of CCI and over 15 other indicators...