Systems Trader turned discretionary

ElectricSavant

ElectricSavant

Retail Spot Forex Traders,

I have tried and tried to learn how to discretionarily trade. I am an avid systems trader and have constantly battled with the changing market characteristics rendering my systems ineffective.

When trying to place the market in a can, systems must be so loose that they give away what the market tries to give them.

I am pleased to announce that I have added a "discretionary component" to my trading and have survived for 81 days. I know this is not a true test, but I hope to be able to adapt to all market conditions and I feel my plan is well thought out.

I still trade a long-term positive interest carry system, but I have learned to goose it with some scalps.

The purpose of this thread is to point out that it is possible to derive enough information from your systems to make additional discretionary trade decisions with. Keep it small and concentrate on drawdown and not yield and you should be able to fine tune your systems to yield a bit more.

Some of the basics such as range, lagging indicators, different time frames would be shocking to you, if you just realized its HOW you use these basic bellweathered principals that makes the difference.

Michael B.
 
That USD/JPY might present just one more scalp, but its getting late and the afternoon here in the MST time zone and this time the market really slows down, so I do not think there is enough steam left for this scalp to work. I gotta watch the pip count and see if the dip will provide an opportunity...prolly not...

I love this work...its just to wait for the London open now...so now I go to Starbucks the Gym and take Wifey out to dinner...

Michael B.
 
I have had similar experiences with automated systems becoming ineffective.

I started designing and trading systems to overcome discipline problems in my discretionary trading. 3 years later I decided to turn off the systems as I handily outperform them...

I found that I was trading to make up system losses and it became an emotional toll.


That said, I learned a great deal from the systems exercise. Now my discretionary methods are very systematic and each component is tested.

Also, if I see the right market conditions emerge again I will be happy to re implement them...

The real difference to me has been the feeling of accountability. There is no externalizing the results with rationalizations about the systems being off track. I own the results.
 
And best of all no one can reverse engineer them...I often have wondered why readers ask traders how do you determine your trades?

How to explain something outside of the "can"?

Michael B.


Quote from mercurial:

I have had similar experiences with automated systems becoming ineffective.

I started designing and trading systems to overcome discipline problems in my discretionary trading. 3 years later I decided to turn off the systems as I handily outperform them...

I found that I was trading to make up system losses and it became an emotional toll.


That said, I learned a great deal from the systems exercise. Now my discretionary methods are very systematic and each component is tested.

Also, if I see the right market conditions emerge again I will be happy to re implement them...

The real difference to me has been the feeling of accountability. There is no externalizing the results with rationalizations about the systems being off track. I own the results.
More...
 
Please do not mis-understand me...I bank 2-5% a month and looking to improve to 3-6% a month and have the possibility to reach 4-7% per month. These goals are based on any amount of initial capital for one year and include compounding.

These superstars that bank triple digits must have huge DD...

Michael B.
 
You know its funny. Positive interest carry has revolutionized my thinking about trading. That little injection of daily interest has removed my fear....funny it shouldn't as it only represents 1/3 rd. of my profits now...lol

The mind of fear & greed must be tempered for a discretionary trader to trade correctly...

Please excuse my early conclusions and I hope I do not embarrass myself with these archived comments. These are my observations and I am glad to share what I am going through...

You know I must battle with myself constantly to not become over-confident. Do you realize that I have only had one losing day in the last 81 days (concerning balance not NAV)? This is a problem mentally believe it or not..

Michael B.
 
When I have been on an extended winning streak I feel most carefree and hence am most likely to err on the side of impulsiveness or excessive leverage.

I constantly remind myself that every trade has the potential to be ruinous.
When I am mindful of the risk trading profits come easily.

When I'm not they are quick to dissipate.

When I feel elated or ultra confident I stop trading and enjoy the good mood elsewhere.
 
Thanks for the input mercurial. I read with great interest. I agree with you. Hey its good to prolong the feeling isn't it?...take a few days and bask in the glory :) (no USD/JPY for me now...I'm done :) until the London open)

With the help of my friends, I will master this in a few years...:) Just think...you all have 8k more posts to look forward to...(if I can stay in the good graces of one person here :))

Trading and writing in ET, can both be like walking a tightrope...

Michael B.



Quote from mercurial:

When I have been on an extended winning streak I feel most carefree and hence am most likely to err on the side of impulsiveness or excessive leverage.

I constantly remind myself that every trade has the potential to be ruinous.
When I am mindful of the risk trading profits come easily.

When I'm not they are quick to dissipate.

When I feel elated or ultra confident I stop trading and enjoy the good mood elsewhere.
More...
 
Michael

Congratulations keep up the good work.

I have never liked systems or boxes and have always preferred the flexability of discreation for the exact reasons you outlined.

Before you know it you will be hooked ... :D
 
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