Why are System Traders Vilified by Discretionary Traders?

[MarkBrown]

Why are System Traders Vilified by Discretionary Traders? Yet you do not ever see System Trades trolling discretionary traders.

I think as a Systems guy, I look upon discretionary traders as "special needs" traders. Often I ignore and or tolerate the few trolling discretionary traders who have completely destroyed this forum over the years.

This destruction can be attributed to especially one sponsor of ET which completely changed the make up of ET and ushered waves of get rich quick newbies who had real jobs and were happy. Now those same newbies are disgruntled pissed off losers running in mobs on these forums looking to extract revenge from legitimate real traders.

So if you fit this profile then this post is for your therapy post away responses if it will help you realize, trading takes hard word over long periods of time and please try to maintain some dignity while learning. Else who wants to mentor a smart-ass.

Mark Brown

 

[marketsurfer]

Because Fixed systems generally get destroyed by the market. Discretionary traders believe they can "morph" with the ever changing market to stay one step ahead OR so they think

With that said, math illiteracy is HUGE particularly among the very people who are attracted to the market therefore these folks are AFRAID of systems because math is required--

surf

 

[Xela]

Why are System Traders Vilified by Discretionary Traders?

I don't think there's one single, simple reason.

It involves a few factors, of which the following three spring immediately to mind ...

(i) Some people who consider themselves "discretionary" traders are motivated a little bit by some resentment and hostility toward people who see themselves as "systematic" traders, sometimes because they tried and failed to make systematic trading work, themselves, and ...

(ii) They know that some peoplewho consider themselves "systematic" traders are actually aspiring traders rather than successful ones, and are trying - sometimes without learning and studying and understanding much - just to "copy something that works" as objectively as possible, and that's clearly not often a successful recipe (to put it mildly), and ...

(iii) Some people confuse "systems-trading" with "automated trading".

I'm a systems trader, through and through, myself, but I still couldn't have done it without the long education, the thousands of hours' screen-time, the 75 textbooks (perhaps 10 of which were very helpful) and all the rest of it. And I don't for a moment imagine that even my own little systems could be entirely codified or automated.

math illiteracy is HUGE particularly among the very people who are attracted to the market therefore these folks are AFRAID of systems because math is required--

Yup - this is also very true.

 

[MarkBrown]

The whole argument of technical vs discretionary is idiotic because we are all system traders if you're not a gambler that is. Every trader has a system if you don't you're a gambler they just don't get it.

So it's really systems traders being attacked by gamblers.

BTW Xela you make some really good points such logic is rare on this forum.

 

[Q3D]

I don't think there's one single, simple reason.

I'm a systems trader, through and through, myself, but I still couldn't have done it without the long education, the thousands of hours' screen-time, the 75 textbooks (perhaps 10 of which were very helpful) and all the rest of it. And I don't for a moment imagine that even my own little systems could be entirely codified or automated.

I was wondering if you could clarify what you meant in your post suggesting you've "done it."

Does that mean you are consistently profitable over a multi-year span with a rising equity curve of at least 10% yearly net returns after commissions and fees are deducted and you have no major draw-down periods (say, greater than 3 out of 12 months)?

That's just my definition of doing it, I never hear much about systems working out like that though.

 

[d08]

Partly because they feel threatened I suppose. You can do much much more through systematic approaches even without complete automation. I've always thought discretionary trading is more fun but then I start thinking about all the life's situations that might affect mental stability and how that could ruin the results.

 

[Xela]

I was wondering if you could clarify what you meant in your post suggesting you've "done it."

Does that mean you are consistently profitable over a multi-year span with a rising equity curve of at least 10% yearly net returns after commissions and fees are deducted and you have no major draw-down periods (say, greater than 3 out of 12 months)?

That's just my definition of doing it, I never hear much about systems working out like that though.

I've been trading (not always full-time at all) for nearly 7 years now, after 4 years before that learning/practising/researching and playing with demo accounts; for the last 3 years I've been making what most people would call a decent living from it, without ever having more than two losing months in any 12-month period.

I'm slightly surprised to see you saying that you never hear much about "systems working out like that". I do, all the time. I suspect that we have different definitions/conceptions of "systems", probably.

 

[wrbtrader]

Why are System Traders Vilified by Discretionary Traders? Yet you do not ever see System Trades trolling discretionary traders.

I think as a Systems guy, I look upon discretionary traders as "special needs" traders. Often I ignore and or tolerate the few trolling discretionary traders who have completely destroyed this forum over the years.

This destruction can be attributed to especially one sponsor of ET which completely changed the make up of ET and ushered waves of get rich quick newbies who had real jobs and were happy. Now those same newbies are disgruntled pissed off losers running in mobs on these forums looking to extract revenge from legitimate real traders.

So if you fit this profile then this post is for your therapy post away responses if it will help you realize, trading takes hard word over long periods of time and please try to maintain some dignity while learning. Else who wants to mentor a smart-ass.

Mark Brown

Here at this forum called Elitetrader.com its the other way around.

Most system traders that use TA and most system traders that do not use TA...the ones that believes trading is quantifiable/scientific...they do not like discretionary traders that use TA with other things because its viewed as art.

The art aspect is dependent upon the trader's experience level, discipline, stress management, a little luck and many other things that are not quantifiable while using with technical analysis. The problem that I see with us discretionary traders is that too many of us "think" we're using TA in a scientific way while preaching at the same time how important discipline, trade experience and such is important in our trading.

That's nonsense in my opinion.

This is when the anti TA folks show up and demand proof from the discretionary traders that are obviously using TA via the above explanation. There's no codes, no programs to be able to prove it works beyond just showing live trades backed by broker statements (e.g. ES Journal, CL Redux and the old Trader PnL Statement threads).

There's nothing wrong with using TA as such but to pretend we're trading via a scientific approach while knowing things like discipline is key in our trading...its ridiculous.

This is why many system traders have a problem with discretionary traders...to many of us discretionary traders believe falsely that our discretionary trading is systematic and can be quantifiable when in reality only a part of the method can be quantifiable (just the TA part...not the art part).

Seriously, how can you quantify discipline, trading experience and such.

Now throw in things like discretionary traders using TA with other things like global economics, global events, political events, fundamentals...its really discretionary and not systematic even if we're using specific rules for such.

Heck, just go visit the System Design threads and the Program threads here at this forum. Rarely do you see discretionary traders go there and bash those guys. In contrast, go to the Technical Analysis threads and you'll see the discretionary traders being bashed. You'll even see threads created in the TA section for the sole purpose of bashing someone that uses TA...someone that's a discretionary TA user.

With that said, I completely disagree with your belief that its the discretionary trader destroying this forum along with disagreeing with the belief that one specific sponsor changed ET completely.

Anybody that's been here long enough will know this forum changed after the 2008 - 2009 financial fiasco. The was another change in this forum soon after dot.com bubble burst. Simply, based upon dramatic changes in the economies and markets for the worst...trading forums like ET reacted negatively to such as expected.

Yeah, I do see often disgruntled pissed off traders running in mobs blaming the market, blaming the teacher for their losses instead of looking in the mirror.

 

[kut2k2]

This destruction can be attributed to especially one sponsor of ET which completely changed the make up of ET and ushered waves of get rich quick newbies who had real jobs and were happy. Now those same newbies are disgruntled pissed off losers running in mobs on these forums looking to extract revenge from legitimate real traders.

Mark Brown

Who is the sponsor?

 

[kut2k2]

The whole argument of technical vs discretionary is idiotic because we are all system traders if you're not a gambler that is. Every trader has a system if you don't you're a gambler they just don't get it.

So it's really systems traders being attacked by gamblers.

I disagree. The clash isn't between discretionary and systems or between systems and gamblers. It's between discretionary and mechanical.

As a mechanical trader, I can trade manually or automatically. Discretionary traders can only trade manually. As a mechanical trader, I necessarily have a system. A discretionary trader may or may not have a system, depending on how much he likes to "wing it."

The biggest indicator of whether someone has what it takes to trade mechanically is ironically how he or she feels about technical indicators. Indiscriminate indicator bashers almost invariably hate mechanical trading.

I've always agreed that most public technical indicators are garbage but to abandon completely the idea that some mathematical analysis of price actions can lead to profitable trading signals flies in the face of everything I've learned and believe about the world I live in.

And technical indicators, well designed, are the easiest way to implement mathematics into trading.

But as surf points out, a mathophobe will never make it as a (mechanical) systematic trader.