Wednesday, 17 November 2010

Autotrading or Discretionary

For me, the ultimate is using both auto trading and discretionary trading, but NOT in the same chart. I am a discretionary trader by DNA. I like the decision making process, the detective work to figure out what "they" are doing, and, of course, I can do better than my FloBot. Better means lower draw down and higher win rate - the heart of successful trading as far as I am concerned.

I have some markers on my discretionary charts to remind me of things. These are programmed in so they just appear at the right moment. I have been careful not to make these too exact, as I am fearful of becoming like one of Pavlov's dogs and just reacting to signals. I had an e-mail exchange about this with one of the guys from the seminar-he is a great thinker and I want him to stay that way. While reminders are good, reacting automatically to them is not, as you will just get an "average" performance. If that is what you want (and there is nothing wrong with that if it allows you to trade many markets at the same time) then by all means go to total algo trading. It will need more capital, but the computer won't tire and can do many things at the same time.

My solution is to trade discretionarily and have FloBot working away on her own.

Meanwhile, back at the market today, the Gap trade was on again. Today's trade again shows how important it is to get the Profile split done before I trade. The trade was pretty easy to execute once this was done. Yesterday's VAH was seen at 1177.50ish and that was my targeted sale point. All I then needed to do was let it play out and scale out on the way down. I was out of bullets when it hit yesterday's VAL at 1173.50. I didn't manage my hoped for 5 points, but it was not too shabby. Yesterday's building of the distribution, instead of further trending down, was my clue for today. The action in Asia and Europe confirmed the vision, so my expectations for the Gap trade were fairly set when the bell rang.


  1. Hello Tom, Can I ask a quick profile split question please. I had also split the profile and on your chart I had D and E together but had then split at F as that was the TPO that broke out of the overlapping D and E initial balance period. It probably makes very little difference due to the low volume of the F period but why do you see G as the correct split and not F?
    Thanks in advance,