The “Pro”-cess - Discipline -

[andre.salmeron]

Current struggling thought I have to work through in getting the process and plan in place.

• if the process of consistency is so important and the “edge” is defined, what’s the point in not automating trading in every situation? Why even have people at a chart?
• Easy example - My s/r line has an expectancy to hold more often than not. Why would I not simply program a computer to just enter at that line and then never look at a chart? This sounds ridiculous in how easy it is, so I want to understand why people are even needed. The consistency of a computer would be far superior to a human with emotions in terms of process and discipline. The edge is accepted here as a s/r line giving a positive outcome of price heading one way over another. If it were this easy , everyone would do it. What am I not grasping?

If you've a fully mechanical (rules based) system with a positive expectancy, there is no reason not to automate it unless you can't afford to pay someone to do that for you or do it yourself. What most (good) discretionary traders do is have a trading system that they can execute with some room for trained discretionary decision-making.

What I mean with that, from executing the same set of rules countless times in, usually, the same market(s), you can start screening for the setups (and the process leading to that setup) which are more likely to be successful.

If you aspire to be a human robot, though, and you have a system which is too complicated (or expensive) to be automated, you gotta have a consistent execution if you want to achieve consistent results relative to the system you're employing. That's when mental skills play a huge role, since you'll likely be a liability unless you can keep yourself together. Even then it'd be nice to account for the potential downturn from you not being able to execute the system at optimal levels -- so that, even if you eventually screw up, you have a long-term positive expectancy.

 

[xburbx]

Thanks. I haven’t ditched it. It’s just sidelined at the moment. There are quite a few on ET that trade 1 or 2 markets day in and day out.

There difference I thought of when trading over many markets was that when trading multiple markets, I can can find when a specific environment is present and I don’t have to change my approach for that day. Trading a single market would require the ability to consistently adapt to what market offers each day . That’s at least what perspective is and how I currently view it.



[
QUOTE="Specterx, post: 4948255, member: 87622"]The concept of trading a single market day-in, day-out is fundamentally flawed. 85-90% of days in any given market offer such a low number of poor-quality setups compared to the best 10-15% of days, that they are not remotely worth trading. It logically follows that the correct approach is to monitor a large number of markets and trade only those which you suspect might have nice moves.

You seem to already know this from your own experience, as you say above - so it's a bit puzzling why you ditched a consistent positive-expectancy methodology to try and grind out ticks in a single market.[/QUOTE]

 

[xburbx]

Today

Started with my trade plan in place. Followed it.

No trades but a few lines drawn

Until tomorrow....

 

[dozu888]

There's no way that a computer program can approach the flexibility and adaptability of a skilled discretionary trader. Simple TA tools which can easily form the basis of a trading algo, like S/R pivots, MA touches or crosses etc. offer no material edge by themselves for precisely that reason.

Profitable discretionary trading really is like being a world-class sports superstar (albeit not as well-paid, you have no team to make you look good, and losing a game means you lose money). The rules of the game stay fixed but each game unfolds differently, and requires not only an exhaustively researched and rehearsed plan but constant on-the-fly adaptation to the other guy's play. It certainly is a paradox which is why only a tiny fraction of those who attempt it (in pro trading or pro sports) are ultimately successful.

Folks read this carefully and understand this.

And OP - you’re wasting time drawing lines.

 

[qlai]

The edge is accepted here as a s/r line giving a positive outcome of price heading one way over another.

Do you trade every s/r line you draw? If not, can you create concrete rules for it?

 

[xburbx]

For simplicity sake of what I am doing here, I am only trading channels that suit my eye. I have put all of my other TA stuff aside and have a basic chart with some lines in front of me. I do have concrete rules for using it. Yes.

 

[qlai]

What I am asking is if you apply any discretion whatsoever after the lines are drawn. Context is hard put in rules.

 

[andre.salmeron]

For simplicity sake of what I am doing here, I am only trading channels that suit my eye. I have put all of my other TA stuff aside and have a basic chart with some lines in front of me. I do have concrete rules for using it. Yes.

May I suggest a very small tweak to your approach? Throw in some horizontal volume bars (volume profile/market profile) in these charts and focus on areas of very high accumulated activity. They're pretty self explanatory and will go a long way in objectively identifying (really) relevant areas with your channel lines.

P.S.: Seriously, do consider including volume in your system, it is a very simple yet powerful mechanism for discretionary and non-discretionary trading systems. Even a simple volume bar will do: if price makes a big move on relatively low volume, don't you think it's something worth noting? What if massive volume comes in but price barely moves? The simple Wyckoffian rule of thumb that the effort should match the results will keep you out of many a-bad trades.

 

[xburbx]

What I am asking is if you apply any discretion whatsoever after the lines are drawn. Context is hard put in rules.

I would have to know more in depth what you mean. I would say the discretion I am using would be prior to drawing the lines but not once they are drawn or once in action. Is that what you are asking?

 

[xburbx]

May I suggest a very small tweak to your approach? Throw in some horizontal volume bars (volume profile/market profile) in these charts and focus on areas of very high accumulated activity. They're pretty self explanatory and will go a long way in objectively identifying (really) relevant areas with your channel lines.

Thanks! I spent about 2 years on MP and VP. I love the concept. I was considering after this batch of trades to take a look at my knowledge of volume to see if there is anything post mortem that correlates to the success or failure. In this first set , it won't be a variable I am using.