every day is another story get a beat on it, throw it against the wall and see how it feels then deal with it
Some of our mechanical systems have a function called "hijack" - which allows you to take discretion when you want to. The "system" gets you into a trade, and you have the choice to let it get you out, or to "hijack" the trade and get out yourself. FWIW, Don
That holds for losses too. By popular wisdom, as there are more losers than winners, ya figure out the rest by yourself. nononsense
If discretionary has advantage over mechanical why should the first trader use 80% rule-based, why he's not just using 100% intuition? Most successful traders didn't exclusively use intuition, they had their system (rule-based) for at least a certain percentage. They can't win without a good trading system. While second trader can go fully with rule-based, no intuition. It looks like rule-based sound better if we compare between 100% rule-based and 100% intuition, excluding the mix. Rule-based can go without intuition, while intuition cannot go without rule-based.
mechanical trading systems and discretionary systems are not as easy to compare as they seem, i think. While generally a person trading is limited to whatever one person (or a team if your a fund) can accomplish, with mechanical and obviously im talking about automated systems, several of them can be deployed simultaneously, each working in different timeframes, different markets, etc etc. To "diversify" your portfolio. The fact that you can run so many at the same time, and shift assests based on recent performance (if you think that increases gains) makes me think mechanical systems have an edge, especially if you take "human effort expended" into account. Of course, on the other hand, if you look at some of the guru type system developers like alan crary, he says he knows he can always stomp the performance of any system he develops, and he actually competes against them....
So far... 25% of my profits come from System Trading and 75% come from putting on scalps... I base my opinion on what has happened to me...I also know a few discretionary traders and I have noted that they are more profitable. I am still learning, but I have the experience to back me up. To me... discretionary trading is when you reward yourself for making a profitable trade, where system trading is where you reward yourself for following your system, no matter what.... Michael B.