Why are System Traders Vilified by Discretionary Traders?

[Xela]

Over the next 200 trades that you take over WHAT time period and WHAT market conditions?

Over the same time-period and market conditions as those on which it was originally back-tested and has now been "forward traded" for three years in a live account in which I do around 100 trades per month, give or take a few.

Being a career systems trader implies they have multi-decade backtested and live market applicability of their systems to trade profitably, yet this does not exist. You're gambling with a belief in probability on your side.

And you're defining and interpreting the terms you use according to your own prejudiced conceptions and perspectives.

 

[d08]

(i kind of see systems traders as rail road train drivers; and discretionary traders as Top Gun ace fighter pilots...it's more of a true craft/art/skill.)

In your scenario the train drivers designed the train as well, not that easy to do.

 

[wrbtrader]

System traders are predicting statistically and probabilistically, over a large number of trades - not individually, over specific trades.

Like so many of the subjects widely discussed (often with some disagreement and plenty of confusion) in trading forums, the conversations often conceal the fact that different people are using words with slightly different meanings, understandings and assumptions...

This forum and many other forums are flooded by traders that say their backtested method has a positive expectancy and many times they have posted statistics verifying such. Yeah, they called themselves "system trader".

Yet, they than say when they go to live trading with real money on the line...the results are very different in comparison to their tested results. Many were not profitable in real trading. Some traders chime in and say the stats must have been curve fitted. Others say the statistics were just incorrect and so on.

I prefer to say that if it wasn't automated...than there's a discretionary element involved that the system doesn't pick up while the real trading does pick it up...more to do with the psychology of the trader (e.g. discipline issues). Its understandable that my perspective is debatable in comparison to the perspectives of "system traders".

Yeah, most of the trading debates here at ET is that many have their own definitions in comparison to others using the same word or phrases. Seriously, there was a thread here about the definition of "discretionary trader". That thread was full of heated debates just on the definition itself. I think I saw about 10 different definitions...traders telling the other he/she doesn't know what they're talking about.

Just the same, I've seen a wide range of definitions of "system trader" at this forum too.

This is not just a forum problem. I was visiting some relatives in Europe and was invited to a party of one relative that's an institutional trader. There were two "system traders" at that party from different companies and they didn't agree on many things involving their jobs, career, let alone trading itself.

They eventually changed the topic to skiing and realized they shared similar perspectives about the best places to ski in Europe.

 

[d08]

It's funny that the only non prop trained retail guys making money are only on elite trader. Can't find em in real life

Well, judging from how you talk about retail traders, no wonder you're not welcome in their circles. I know more than one who has made serious returns and no, he wouldn't want to meet you.

 

[marketsurfer]

Well, judging from how you talk about retail traders, no wonder you're not welcome in their circles. I know more than one who has made serious returns and no, he wouldn't want to meet you.

LOL, ,i would be willing to bet i have more trader friends and associates than you do.

Ya think one or another would have wanted to prove me wrong over the years--- nope, nothing, crickets.

Im saying that non already wealthy, non propshop trained, retail CAN NOT make a consistent living with the markets as their ONLY source of income-- those with wealthy or high earning wives are also excluded from my CAN NOT statement---In other words-- retail with active trading as their sole source of income do not exist above subsistence level--- even poverty level is a stretch..

THE REASON IS-- one needs money to make money in this business-- without OPM its near impossible to make it starting from scratch

surf

 

[d08]

LOL, ,i would be willing to bet i have more trader friends and associates than you do.

Ya think one or another would have wanted to prove me wrong over the years--- nope, nothing, crickets.

Im saying that non already wealthy, non propshop trained, retail CAN NOT make a consistent living with the markets as their ONLY source of income-- those with wealthy or high earning wives are also excluded from my CAN NOT statement---In other words-- retail with active trading as their sole source of income do not exist above subsistence level--- even poverty level is a stretch..

THE REASON IS-- one needs money to make money in this business-- without OPM its near impossible to make it starting from scratch

surf

Guess all these years I've been paying for everything with air then, how odd that my cards work.

From what I've read, your friends are snobby OPM people making low returns. Us retail traders actually eat what we kill instead of charging fees for losses.

 

[newwurldmn]

In my experience, it's systematic traders that vilify discretionary traders. They tend to believe that successful discretionary are just lucky, even though the wealthiest traders on the planet are all discretionary.

 

[wrbtrader]

In my experience, it's systematic traders that vilify discretionary traders. They tend to believe that successful discretionary are just lucky, even though the wealthiest traders on the planet are all discretionary.

I remember way back when a lot of pro traders refer to Paul Rotter as a private trader and lucky especially after they learned he was using point n figure charts as a discretionary trader.

Took a few more years of profitability before the guys to say "maybe he actually has real trading skills". I think he has now transition into a hedge fund manager or something like that. Just as private as ever.

Yet, I recently heard a rumor he's going to quit that and go back to being a private trader. If such happens, I'm sure he'll use his networking resources to his advantage.

 

[Handle123]

System traders are predicting statistically and probabilistically, over a large number of trades - not individually, over specific trades.

Like so many of the subjects widely discussed (often with some disagreement and plenty of confusion) in trading forums, the conversations often conceal the fact that different people are using words with slightly different meanings, understandings and assumptions.

In this case, the word causing the disagreements and confusion is "predicting". The confusion in this thread, and in many others like it, is between individual and collective predicting.

I can't tell whether any individual trade I make will be profitable, but I know with a very high degree of mathematical confidence that the next 200 trades I make will collectively be profitable.

On each individual occasion that one trades, one can't predict the future.

But, given the familiarity and expertise with statistics and probability that every successful trader needs and has, one can confidently predict it collectively, in the long run, over the times ones chooses to trade (and of course that's precisely why one chooses those times to trade). And that's what one needs to be able to do.

I agree in most part of what you write, but it still comes down to any one trade which makes up 200 or 20,000 trades, each trade or overall position we are predicting for possible profitable occurrence, whether you use Systems or discretionary, we have probable clues that we will be profitable at some point. But clearly, does any of this really matter? Unless one loves to lose, we seek profits as end results.

Good trading to all.

 

[wrbtrader]

...Us retail traders actually eat what we kill instead of charging fees for losses.

Reminder, this is ET.

Everybody has their own definition of a "system trader", their own definition of a "discretionary trader", their own definition of a "retail trader", their own definition of a "private trader", their own definition of a "profitable trader", their own definition of a "automation trader", their own definition of a day trader and so on while thinking the other person doesn't know what he/she is talking about.

There's no professional organization for us unlike other types of traders (e.g. institutional trader).

Thus, whatever we think our title is as a trader...be happy with it because others have proven they will not agree with you. Just as important, be careful about getting into debates with those that keeps changing (updating) their own definition to fit into what ever debates they've gotten themselves into...we got a few well known trolls at this forum that do such in an effort to try to dismiss you.

Lets now give each other a hug and say I'm sorry (sarcasm).