metooxx-- this is not meant as a challege0 I am just curious. I have met trend followers, and top and bottom callers and everything in between. What type of trade is a trade that no sane person would take, it seems to me that might be a perfect trade opportunity.
It is hard to say without getting into proprietary concepts, so forgive me if my example is a little vague. Say the S&P, Nasdaq and Dow futures broke through major resistance, are @ their highs and flying; equity X is trending up following the market and stalls, reverses a couple of ticks and you buy a put on X, because a computer pattern happens to line up for a millisecond. Instant disaster.
I started, as many others with discretionary methods, however ended up in systematic trading, and that`s where I am for the last (profitable) 5 years. Trading systems is a whole large field of science (math, statistics) and its impossible to describe all aspects of that in the "Forum"`s post, but maybe these few observations be helpful: 1. It is not easy to find reliable cyclical pattern in the markets. So If You want to do this for living diversification is a key - diversify strategies as well as the markets. 2. I believe that most important in trading is losses management. System analysis can help You with that. This, combining with proper bet sizing (MM) is a key to consistent growth. 3. On psychological side systematic trading is sometimes tough. Very often I get signals which I find in conflict to AT, however - discipline in system trading is a key, so I have to follow the signals. Then if I look at big picture, the results speak by themselves. 4. Some time ago âFuturesâ magazine hosted few top traders. I especially like M. Muggiero`s opinion from that meeting: âthe trader who can make without computer is like a guy who can throw a 100 miles per hour fast ball... that`s God given gift... but there`s a small percentage of people who can (do that)...â I think that explains the difference. 5. The system can be simple, but managing funds and recognizing system`s efficiency requires professional knowledge and very well done analysis, which is the common problem of most system traders.