The day that the newbie trader just gives up on making huge money and starts following an outlined set of rules is the day money starts flowing in. As soon as those rules are abandoned the trader will give some back and once he/she makes the connection the rules will be back in place. Its a constant game of following the rules. Each trader MUST OUTLINE their game AND FOLLOW it to the T. Until you do that you are just bringing $ in and sending $ out.
EDGE IS THE CENTER, THE MOST CRITICAL. ALL THE MONEY MANAGEMENT, ENTRY/EXIT ANALYSIS, PSYCHOLOGY, DISCRETION IN THE WORLD IS USELESS, IF YOU DON'T HAVE A BASIC SYSTEM, METHOD OR OTHER WAY TO OUTPERFORM. DUNNO WHY THIS IS SO HARD. Trading commission, fees, errors, slippage, hardware/system fees and all else take a piece out of everything. You are not going to overcome the house edge if you have no outperformance edge.
The OP obviously hasn't been in the saddle very long. If he had, he'd know that discretion is the number one reason why over 95% of traders fail. The average person entering the trading arena is very poorly equipped to make discretionary judgements about anything.
Its alot easier than this. Most people aren't cut out to trade a system that actually has an edge, coupled with the fact that most people don't have a system/method thats better than random either. Can't have one and not the other. Add in that most people don't have the capital or a strong enough ego to take several on the chin in order to build either of those skills before getting KOed.
IMO, the op is wrong. Personally I work hard to remove as much discretion from my trading as I can. There is no discretion in how a machine works. It does as it's programmed to do. That's how I want my trading to be, execute like a machine. As long as you have a positive expectancy system and proper risk controls, you will come out ahead if you follow the system. If I override one of my systems based on my gut, I keep a record of that. Is my gut consistently beating the system? If yes, build what your gut is telling you into the system, if not, keep your brain shut off and just follow the damn plan!
Correct to a point. Some things are too nebulous to systematize For example, when I was getting in the S&P today at the open - there were two issues: 1) market was hanging around 1400 - a lot of S&R around this - a magnet for pentup orders 2) market has been moving sideways since yesterday, so harder to judge direction. So this affects entry + stoploss/profit target orders, etc more strongly than normal.
I agree. You can't mechanize all discretionary trading. I do some discretionary trading, but I actually count that as a separate strategy and break out the results individually. I do this to track my progress and see if I'm any good at it. If things are going good, I'll up the size, if not, I cut back. The op was talking about most people losing because they aren't applying enough discretion. IMO, traders would be generally better off by applying little to none, especially when they're still wet behind the ears.
Your listing of criteria for this morning is not at all nebulous, and very easy to systematize. (1) Market was hanging around 1400, and (2) Little movement since yesterday. What is nebulous about that? In my case, seeing the same, my system said "stay on the sidelines", as going short or long isn't worth any risk.
What does it feel like to have two orders in the market at once while you are in the market? What ratio do you use to compare what you made with what you could have made?
First of all, my trading is 100% discretionary. It really isn't rocket science. Just keep it simple. If the right side of the chart is higher than the left side then go long. If the right side of the chart is lower than the right side then go short. If you're wrong, get out and look for another one. As far as systems the same thing applies, keep it as simple as possible. I have never seen anyone with 15 squiggly lines on a chart make a dime.