Monday, 6 December 2010

It's the Trades You Don't Take

The chart below shows a mechanical trading system with a good profitability profile. It makes money almost every month and when it has a losing month, it doesn't lose much.

But when I compare this to discretionary trading, it's not too hard to see the trades that I would not have taken or not taken at that trade location.

As discretionary traders we optimise our performance through the skills we develop using our discretion. The methodology I use and teach requires the trader to look at the whole picture and fit that picture into his vision and into the context. This enables me to beat FloBot. But then I have to sit there all day and only watch one or two markets. Whether you go the discretionary route or the autobot route is a choice that we all can make with the great technology now available.

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