Having a system vs freewheeling

Discussion in 'Trading' started by jalexander, Feb 3, 2014.

  1. Most of the literature on trading recommends having some kind of system/set-up and just mechanically exploiting that set-up without emotion. And this is all for rational reasons like grinding out an edge over many trades etc...

    But from what I've seen of traders like Soros and particularly guys like Paul Tudor Jones in Trader: The Documentary. PTJ tends less to trade on some mechanical system and more on instinct or empathy with other traders fear & greed.

    Discuss.

    :confused:
     
  2. Systems don't take human psychology into account. It's better to understand the markets and go with your intuition than to have a system.
     
  3. kut2k2

    kut2k2

    Depends on how you're wired. Mechanical systems that are consistently profitable are best but they are hard to come by. Some traders can develop their intuition or insight to the point where it is profitable. Some traders use a combination where they use one or more technical indicators to enhance certain price action aspects but then they use discretion for the final decisions.

    Clearly most traders are awful at both methods because they fail. They just fail.
     
  4. Doobs789

    Doobs789

    You must have some sort of strategy, or "system", in order to trade profitably. It does not need to be fully automated, or mechanical, but you must be able to identify a quantifiable edge. Of course markets are fluid and constantly evolve, but it is not possible to consistently succeed by making random trades, and hoping they work out. Have a plan.
     
  5. dbphoenix

    dbphoenix

    Your first post was in August. Are you just starting out?
     
  6. 15%

    15%

    My entry and SL is a plan. My profit/exit does not follow a strategy.:)
     
  7. BSAM

    BSAM

    Having a system vs freewheeling

    If you are freewheeling, you will soon be freeloading.
     
  8. Redneck

    Redneck

    Ever seen a great magician/ magic show

    What you see is the magic happening

    =================
    What you don’t see;

    The work it took to prefect it
    The endless practice
    The thorough understanding he possess of his audience – and how to best and repeatedly exploit them
    The thorough understanding he possess of his craft – and how it need be consistently applied / honed

    ==============

    Now if you think for 1 minute I’m saying trading profitably is magic – or even remotely resembles magic – then you’re way the hell off

    When one understands how the mkt works.., possess the skills to exploit it…, and can consistently apply said skills

    Then to the outside observer it probably does “appear” like magic (freewheeling)

    It ain’t even close

    RN
     
  9. Sort of. I made some money in another area of wall street, but my real interest is in trading (something I have had very little practical experience with).
     
  10. dbphoenix

    dbphoenix

    Well, then, whatever other traders do or don't do is of no importance with regard to your trading. You'll learn quickly if you don't already know whether you prefer a mechanical approach or a more discretionary approach. You'll also learn quickly if you don't know already what bar interval you like, if you're going to use charts at all.

    That may or may not be helpful but at least it will save some time.
     
    #10     Feb 4, 2014