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>Descretionary traders make decisions that are based on personal
>knowledge and circumstances, perhaps using many factors unknown to
>themselves. Like which journal they read the night before.
This is the nub of the question for sure, and the point that I am
investigating.
I suspect that when they (self-nominated DT's) think they are making
discretionary decisions they are in fact making rule based decisions.
That is why I asked for specific examples of 'discretionary' decision
making e.g. I haven't seen Bilbo's chart yet but I consider it highly
unlikely that the decision about whether a trend is in place is a
discretionary decision - I can define a trend in several different
ways - all of them can readily be written as a rule (in words or with
code) - I don't care if the definitions are 'correct' or not as long as
the system that they are part of works i.e. my rules for a trend depend
on the context.
As Dennis said, our rules might be difficult to program, causing us not
to automate the trade, but mentally we are still running the rules and
if we are honest with ourselves we do know what the rules are.
>For a novice traders to try and mimic the techniques (of Discretionary
>Traders) without
>having similar backgrounds merits caution.
What I am suggesting is that, over time, the sub-conscious mind will
automate what was intially habitual conscious behaviour, and even make
some improvements on it, so that 'we' can skip the conscious part for
some 'tasks' e.g. driving the car becomes second nature.
That won't happen for new traders, in a short time, so they do need to
persevere, be patient and not try to mimic people who have been around
for years.
IMO formal (written) rules based trading/backtesting/optimization is
the best place to start - it grinds the basic lessons in very well.
If anyone can look at a chart, and without recourse to any rules, know
which way the price is going to move and trade successfully (long
term) on that basis then that is something else altogether.
If it is at all possible to do that then it definitely can't be taught.
That is why I asked, "Anyone doing it?".
It is just like >100%PA returns - anything is possible but once someone
confirms that they have done it then it moves from the realm of
possibility into reality.
In the meantime I will stick to my guns by saying that "except for
people who KNOW what the price is going to do everyone else is a rule
based trader and categorizing traders, as DT's or MT's, is arbitrary".
brian_z
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