DAYTRADING Fundamentals Message Board

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Strategies & Market Trends : DAYTRADING Fundamentals

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To: Eric P who wrote (2615)	8/10/1999 7:29:00 PM
From: TraderAlan	Read Replies (2) of 18137

Eric, System trading forces you to visualize a two dimensional view of the markets and to focus on a finite number of specific quirks/movements within the markets to make your money. This takes you out of the market when it doesn't meet the conditions that you set. By looking only in the rear view mirror, you deny yourself analysis of the current conditions which may negate the trades that you're considering or force you to the sidelines on perfectly good opportunities that don't fit within the two dimensional scheme. If you're a momentum trader, for example, weak markets force you to stand aside when a simple swing strategy will produce a high percentage of profitable trades. The nature of the market dictates that whatever edge you try to program from your backtesting and optimization will disappear immediately as the insiders adjust and eliminate the inefficiency that created the signal that you're acting on. The most successful traders anticipate the future rather than evaluate the past. Controlled discretion allows you to throw out everything that worked yesterday and execute what's working today. Alan

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