Dumb Questions From a Noob

Words can have more than one meaning in different context. In his post, it looks like he is saying that a systematic strategy is predetermined while a discretionary one leaves the trading to the manual trader at that time. I'll make the case that experienced, successful traders will code their systematic strategy to mimic what they would do manually with the same rule sets.
 
It seems the best is to learn just enough to trade as opposed to learning everything about trading. When I used to work I was a systems analyst but mostly I was a UNIX sysadmin, Oracle DBA & Perl programmer but I didn't learn everything about those 3 areas just enough to do what I needed.
 
KGTrader4 said:
Can someone explain to me in plain English what the difference is between RSI and RS? I’ve always looked at RS, from what I’ve gleaned reading IBD. But I don’t recall IBD ever mentioning RSI. And yet I see traders (one that I subscribe to his service) use RSI all the time.
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IBD which I also, subscribe to has relative strength rankings. In simple terms, relative strength is a measure of a specific stock strength to the entire stockmarket. An IBD stock ranked 99 in relative strength is a good stock to buy. Here is another way to do it. Say, XYZ stock is up big, while the stockmarket was dropping like a rock, that stock XYZ has strong relative strength and if you were looking for a stock to buy on the upside, you would want to buy that stock XYZ. RSI is an indicator that measures a stock's relative strength. The simplest way to buy the strongest stocks in any given time in my opinion is to use Finviz.com. Find the strongest group the last 3 months then, find the strongest stocks in that group. Good trading or investing should not be complicated.
 
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KGTrader4 said:
What is “discretionary trading”? Before I retired, as a financial advisor, it meant to me, I had discretion and managed accounts without the ok from the client in each trade.

but I’m guessing it means something different here. Is it trading in gut feel, as opposed to rules based trading? That’s my guess, but I’d be surprised if that’s actually a thing among professional traders.
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Definitions will vary on this point. To me discretionary trading isn't really about "feel" vs rules, but whether humans are involved in the trade decision loop. If you have an algo(s) which makes all the decisions from trade identification to entry, management, and exit, that is systematic or algo trading. If you as the trader are responsible for those decisions, that's discretionary. I'd venture that all successful discretionary traders have large bodies of rules they follow, the discretion is in how they are applied to a specific situation... and also knowing when to break the rules.
 
Specterx said:
Definitions will vary on this point. To me discretionary trading isn't really about "feel" vs rules, but whether humans are involved in the trade decision loop. If you have an algo(s) which makes all the decisions from trade identification to entry, management, and exit, that is systematic or algo trading. If you as the trader are responsible for those decisions, that's discretionary. I'd venture that all successful discretionary traders have large bodies of rules they follow, the discretion is in how they are applied to a specific situation... and also knowing when to break the rules.
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good points. The way I take your response, my feeling that discretionary is the opposite of rules base is SORT OF correct, but it’s a question of degree of difference.
 
Robert Morse said:
This seems like a good resource.
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so after watching the first 10 minutes of the video, my take is RSI is the more important indicator if you want to gauge whether a stock is overbought or oversold. Higher is overbought lower is overbought. Am I correct?

and RS is a useful tool to tell you sort of, where to focus your efforts in finding best ideas. I.e. string sectors, strong stocks within a sector
 
Robert Morse said:
Still means the same. Someone is making trading decisions and it is not the owner of the account.
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Exactly.
Also some traders/investors use it like M Webster' s definition; incudes good judgement, discernment, wisdom, prudence............................................................................
 
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