Discretionary Versus Mechanical System Trading
- Thread starter Murray Ruggiero
- Start date
I think the numbers of this system are quite good, and many people would be happy to trade it. For those who believe an equity curve is a waste of time, you'll be pleased to see that I've deleted it from the test report. Only the numerical statistics are shown.
I have found it to be an acquired SKILL anyway one dices it up. ART implies that one can be creative about how to tap into the market's delivery stream when in fact, the market's delivery has no correlation with one's creativity in tapping tinto the stream. A painting is creative and artists are rewarded by the number of people who find and value the artists work to be creative. What underlies ALL effective tools wrt the market, is their ability to read and be in synch with the markets dynamics. Is it science? Too many textbooks have yet to answer this Q... Is it mathematical? Is it logical? Any system whether discretionary or mechanical need only do one thing, read, partner, and keep in synch with the market... The better the skill, the more effective the systems is, the greater the delivery... Like most things, people seam to not like to read, this is especially evident in ET wherever one finds long posts... Shortly thereafter, follow up posts state, "i didn't can't past your first sentence", "too long", "sum up in one word", "jibberish", "long winded babble"??? What is strikingly profound is that the market is also read. Market illiteracy is strongly coupled with failure. We all aware of the 95% failure rate. It might as well be the market illiteracy rate...
in that case investing in treasuries and rolling them over is ideal - you will have 0 drawdown and a guaranteed return and an infinite return on drawdown.
you have to take into consideration something like the sharpe, sortino or omega ratios. just taking drawdowns into consideration is dangerous - because it doesn\t tell you the volatilty of the system.
im talking about futures trading and im talking about the return on drawdown not just the drawdown. and 7 months being under water will trememdous effect the sharp ratio. investing in treasuries is not trading but for security and collateral. i still stand by my statement. for me, return on highest dd is my main number.
My understanding is that a purely discretionary trader should have >10yrs experience. I'll buy that.
But I believe that the best and worst part of the system is us. Chess has shown us that computers crunching billions of calculations/sec are still roughly equal to humans (like Kramnik, Kasparov). A chess player has to handle and master an immense amount of emotions and primal instinct during a highly fatigued and intense 6hr battle. They focus a lot on mastering this element of their game rather than avoiding it.
As an example, part of one of my systems is a visual description of the chart. I've sketched curves resembling the best shape but have no mathematical constraints. By definition, this is a mechanical/discretionary entry using my own memory bank as one of the jurors. In addition, if a chart doesn't display what I call "enthusiasm", neither do I. I don't want a mechanical system getting me into one of these trades.
I understand the need to acquire experience, I just don't agree with this mechanical mindless drone argument.
Why should a trader remove his best asset from his investment?
But I believe that the best and worst part of the system is us. Chess has shown us that computers crunching billions of calculations/sec are still roughly equal to humans (like Kramnik, Kasparov). A chess player has to handle and master an immense amount of emotions and primal instinct during a highly fatigued and intense 6hr battle. They focus a lot on mastering this element of their game rather than avoiding it.
As an example, part of one of my systems is a visual description of the chart. I've sketched curves resembling the best shape but have no mathematical constraints. By definition, this is a mechanical/discretionary entry using my own memory bank as one of the jurors. In addition, if a chart doesn't display what I call "enthusiasm", neither do I. I don't want a mechanical system getting me into one of these trades.
I understand the need to acquire experience, I just don't agree with this mechanical mindless drone argument.
Why should a trader remove his best asset from his investment?
Because these shapes you are drawing on your chart is just wishful thinking on your part. Your brain comes up with all sorts of "patterns" out of seeming randomness. The reason to disassociate yourself from trading is that too often our brains are fooled by randomness and emotional decision making takes over.
Life can be represented and explained thru numbers, and that includes the markets.
Life can be represented and explained thru numbers, and that includes the markets.