Partly true; but discretion shows me when to weight a 50 dma or 200 day moving average more. And feelings /emotion have little to do with that. NO such thing as luck-that 's a small sample. Walking under a ladder ,that is not bad luck-thats stupid risk mostly.Thanks for comment
Manual trading as in without automation = Discretionary trader That's why two traders using the exact same written trading plan while trading the exact same trading instrument...each trader will have different trade performance results because everybody reacts cognitively different from each other. Now throw in things like experience, perceptions, stress and such...we become discretionary even when using the exact same written trading plan. Too many trade journals here at ET as proof by traders trading the same "pattern", "price action", "indicator" or whatever...different trading results = discretionary Also, lots of trade journals here at ET by traders with positive expectancy of their written trading plan after it was backtested but the real money results are completely different...sometimes losing.
Experience is crucial. But what factors has your experience identified as being important to a trading decision and how do you weight each?
If they trade differently off the same plan, its two different plans. Or else one doesn't have a plan at all?
I mentored a fellow. He didn't ask nor did I offer but a few questions evolved into a months long project. I gave him my trade plan along with charts and many examples but he would pose a lot of hypothetical questions..."what do you do if bla bla bla.." I kept telling him that each moment in the market is different to another and strict definitions given 3 time frames in a dynamic market cannot be given. We all have different cognitive fields and our trading decisions will be unique to each of us.
That doesn't mean there isn't a plan or rules...one would either have to be a savant or a fool to trade without them, it's just that the market is ever changing and there is an interpretive element in discretionary trading.
Largely because the "expectancy" thing is based on a fallacy, that past results are a predictor of future results, i.e., the R:R ratio is determined by whatever rewards there may have been for past trades. Without it, there is no "expectancy", unless perhaps one uses the "hope for" definition of expectancy. The fact is that there is no way to determine the reward -- potential or otherwise -- in any given trade ahead of time. The trader is only in control of risk. Unless he cuts his profits short in order to meet some reward goal of his, which defeats the purpose of letting one's profits run. Many traders figure this out eventually and set themselves what they believe to be an an achievable result, e.g., a 1:1 R:R ratio. Or 1:2. This requires a high winrate, which may be why so many novices are obsessed with winrates. Unfortunately, unless one achieves a replicable winrate over time and trades enormous size, the effort just isn't worth it, much less the time. This is why professional traders are far more concerned with risk than they are with reward. As to whether or not there will be any reward at all, that's where the trading plan comes in. Either one's account balance is red or black. If one has a sound trading plan, it will be black. Otherwise, one can act as one's own snake-oil salesman and go on about "expectancy" and still struggle to break even. This can and often does go on for years. It's also worth pointing out that Tharp isn't a trader. When he tried, he failed (search for his son Robert's posts). This may aid the novice in evaluating what Tharp says about winrates and R:R ratios.
You must have a plan as to what you interpret, what you don't interpret at certain times, and how much weight you give your conclusions on each factor. To not have a plan would suggest you don't consider the same factors every time, or you weight them differently today from yesterday. Of course the market is changing continuously, but you must be aware of which changing factors are relevant yo your trade decisions and how much they have to change by to go from being interesting to vital.