Poll: Are you a system trader or a discretionary trader?

W

WDGann

Reason for this poll is simple. I've noticed I get off the thread because there are a lot of differences with how we think about trades. One of the conclusions I got is the difference between system trader and a discretionary trader.

Along with the poll, would be nice to discuss through some differences and similarities between them.
 
1. To be able to code in some sort of trading software(ex. Easy Language, MetaStock, WealthLab, C/C++-DLL, etc. etc.)

2. Only trade the signal. All would be system trader, some would be a hybrid.

3. Thorough Back-testing before trading, period.

4. At least understand basic back-testing performance report.

Let's start talking about this? Do you agree? LIke to add something?
 
hi

I trade a system with no overruling. I can go shopping or do some sports and my excel sheet do my trading for me.

No stress no head ache!


I can trade without fear and greed and that is my major reason.

When I am in a draw down phase I can get confidence from my backtests and my past trading results. I need plenty of confidence when I am 10% down to keep on doing what I have done.


just my thoughts
 
System trading (with manual orders) is the only way to keep my darkside out of the mix. Also gives me less stress and more confidence knowing the historical probabilities of each trade. :)
 
(some of these have been mentioned already)

<b>PROs of System Trading:</b>
1. I'm not tied to the markets all day -- get the data, crunch the numbers, submit the orders and get on with life (I can even trade while on the road).

2. I have plenty of time to work on tweaking the current system or work on new systems -- I can adapt to changing market dynamics because I have the time to consider those issues.

3. I have lower stress knowing that I am following a consist plan with both backtested and in-trading performance results.

4. I have clear performance targets -- backtesting helps characterize risk and drawdowns so I know when the system is failing.

5. The tools that automatically generate future trades also automatically analyze past trades -- no time-consuming, subjective journals.

6. Its easy to stay consistent and know that performance is due to a stable system, rather than a "feel" for the market that might not be there tomorrow.


<b>CONs of System Trading:</b>

1. Residual fear that the system may break or has broken -- is a loss or minor drawdown just a statistical wiggle or is it a sign that the system has failed?

2. Its hard to encode complex subjective/fundamental analyses into the system -- reducing complex situations to rote rules based on easily collected data is hard.


<b>Why System Trading Works for Me:</b>

1. I'm an engineer/scientist by training -- I prefer reading a math handbook to reading the tape.

2. I've been writing software for over 25 years -- making a computer do what I want it to do is both fun and rewarding.

3. I know too much about human cognition to ever ever ever trust intuition -- although it is very interesting to understand why intuition works so well is some realms of life, but not others.

4. I don't need action -- I'm fine with a EOD system that doesn't always trade everyday.


Happy trading, how ever you trade,
Traden4Alpha
 
Originally posted by Traden4Alpha
(some of these have been mentioned already)

....
4. I don't need action -- I'm fine with a EOD system that doesn't always trade everyday.



This would be tough job to make any add-ons to this post. Such great summary.
System trading is not fun, neither short cut. I have to diversify over many markets to be profitable, also the math must be well done.
However, through the time I can work on different strategies and live.
Good discretionary trader can make more, sure, buy there is always trade off.
So, let`s forget about who is discretionary or systematic, while trading is a pain no matter. The only choice is which price You are willing to pay: daytrade pressure or system drawdowns.
More...
 
Originally posted by virgin
The best trading systems cannot beat the best discretionary

traders....
More...

You really think so???

I'm a hybrid. (Did I actually name the brand new category for this style? *Wooot!*) Well, I'm the best both worlds... I can outperform some discretionary trader and some system traders. Still some system traders outperform some discretionary traders and some discretionary traders outperform some system traders.

Who care who outperforms who. As long as we are profitable in our own way. Having a comparative perform expectancy is scary.
 
Originally posted by Traden4Alpha
(some of these have been mentioned already)

<b>PROs of System Trading:</b>
1. I'm not tied to the markets all day -- get the data, crunch the numbers, submit the orders and get on with life (I can even trade while on the road).

2. I have plenty of time to work on tweaking the current system or work on new systems -- I can adapt to changing market dynamics because I have the time to consider those issues.

3. I have lower stress knowing that I am following a consist plan with both backtested and in-trading performance results.

4. I have clear performance targets -- backtesting helps characterize risk and drawdowns so I know when the system is failing.

5. The tools that automatically generate future trades also automatically analyze past trades -- no time-consuming, subjective journals.

6. Its easy to stay consistent and know that performance is due to a stable system, rather than a "feel" for the market that might not be there tomorrow.


<b>CONs of System Trading:</b>

1. Residual fear that the system may break or has broken -- is a loss or minor drawdown just a statistical wiggle or is it a sign that the system has failed?

2. Its hard to encode complex subjective/fundamental analyses into the system -- reducing complex situations to rote rules based on easily collected data is hard.


<b>Why System Trading Works for Me:</b>

1. I'm an engineer/scientist by training -- I prefer reading a math handbook to reading the tape.

2. I've been writing software for over 25 years -- making a computer do what I want it to do is both fun and rewarding.

3. I know too much about human cognition to ever ever ever trust intuition -- although it is very interesting to understand why intuition works so well is some realms of life, but not others.

4. I don't need action -- I'm fine with a EOD system that doesn't always trade everyday.


Happy trading, how ever you trade,
Traden4Alpha
More...


I am totally sytem/mechanical, and Traden4Alpha lists the Pros & Cons better than I ever could. I am in total agreement with this, and while I am not an engineeer/scientist, I tend to think like one, so I get total joy from experimenting with and testing new systems, while also looking for ways to improve what I am already doing. Once my trades and P&L orders are in place in the morning, I am off to the gym for a couple hours, then lunch, then spend the afternoon testing new trading ideas that popped into my head during the morning. The less I look at my quotes intraday, the more money I make. This is what works for me.....
 
Originally posted by virgin
The best trading systems cannot beat the best discretionary

traders....
More...

I guess it depends on what you mean by "beat".

It's hard to be a discretionary trader while sitting on the beach in Tahiti.
 
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