I so agree with both comments.
Without very deep pockets it is really good to have a combination of mechanical and discretion. It goes against system traders wisdom (always trade the system without any exception, without any delay).
But the thing is when your basis for trading is mechanical or systematic, you have more chance to make it than otherwise. Discretion improves the equity curve over time (with experience that is).
That is my experience anyway.
With the systematic basis, your brain can concentrate on other things and learns the patterns of when your system does not work (the system is not capable of that obviously).
backtesting is something different.
it can be used to test an idea. it is not necessarly to trade this idea. in other words when you backtest, you don't always try to build a mechanical system. Anyway, indeed, it will tell you what does not work and that's as important as telling you if it does. (more important in fact, since you want to protect your capital first).
Granted, people backtesting have in mind to build a mechanical system. I guess. Nowadays I do backtest without this goal, just to verify hypothesis about the markets.
trading is indeed about probabilities. that's why nothing works all the time. not even a discretionnary trader (!). You can make money either way and make a living. it can be purely mechanical and automated, or discretion with a strong method (or few methods used depending on context).
Over time, it seems people got educated about the difference on ET. The threads are not battlefields anymore (so far
).
I built many systems.. or should I say scratched many systems. and what works is usually simple and directionless, market neutral, arb. that's rarely what you find out there (which makes sense anyway).
tntneo
