fut_trade,
I'd like every advantage "discretionary traders" have. "discretionary traders" is a new term for me. Every trader has to have a set of rules. To me a system is just a way to trade a pattern. My point is that a book showing a few charts with Bollinger Bands, moving averages, DeMark Indicators, etc., does not provide a tradable system in itself. And even if it did provide clear buy and sell signals, I still want to see the system tested to make sure it produces a profit.
It may be hard for us technical/analytical types to swallow, but I don't know of anyone who has reduced trading to anything like a deterministic set of rules. My impression is that some of the best traders talk about such fuzzy things as "being in the zone" or simply being in synch with the market. Ultimately, one might be able to quantify all that, IF you could really identify all the inputs and processes used by these successful traders. As with many other human endeavors, that has proved very illusive. I could analyze every movement ever made by a Michael Jordan and never come up with a smart mechanical system to reproduce them because I would never be able to model the stimulus and response that enabled him to do things at the right time. Systems based on neural nets or other AI approaches may do better than the average person, but I don't think any of them can compare with having the "feel" for what inputs are important when and adapting to subtle changes with modified processes.
If your system is working, by all means use it. If it stops working don't be too surprised, and accept the fact that it doesn't work anymore. That seems to be the way the market works no matter how clever you are.
Dan |
