Tuesday, 27 July 2010

Rules are Rules or Are They?

A discretionary trader by definition, trades discretionarily.

Sounds simple but then why do so many discretionary traders try and have mechanical trading rules? If you trade mechanically, you are better off programming a computer and having it execute your trades because it doesn't get tired, doesn't get faked out and is both focused and can trade many markets at the same time.

As a discretionary trader I am trading a scenario that reveals itself in a "picture". The picture needs to look "right". "Right" may mean different things in different contexts. This why I say that sometimes I place more emphasis on one thing than on another. I trade my picture as I see it. I am sure that all successful traders develop a 6th sense of what they are seeing and that sometimes they can't explain why something doesn't look right or when something does. This 6th sense is something that is developed through the creation of a solid trading plan and then SIM trading the plan until you can do it in your sleep without stress. Once you reach this point, you begin to get a sense of the market and see more than the sum of the parts of your picture. CP is now definitely here.

I was training today and did not trade so I thought I'd show some Kiki trades of the Euro FX.


  1. Hi, EL! Would you share this MarketDelta chart definition?

  2. How do you backtest this discretionary 6th sense approach with any degree of accuracy?

  3. Ceshiatti, you can find all the templates under KEY POSTS for all platforms we have them for.
    Anon, we backtest mechanically by computer and get an idea of the profitability. We then do a manual check of the trades and finally we SIM trade and get actual stats.