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> I disagree completely on having to be on a constant quest for new
> methods. The markets may change in terms of bear/bull and other
> things like volatility but the Price action doesn't. I've been
> trading the same methods for years and while I have added a wrinkle
> here and there as I become more experienced, the underlying
> methodology has remained and will remain constant.
I suspect you have changed more than you realize. The markets DO
change and they DO act in different ways, and a successful trader
must adapt to those changes to continue to succeed. I'd guarantee
your trading methods are not identical to those you used in early
2000. The broad-brush approach may be the same, but I'd bet a lot
that your fine-detail implementation of those techniques has changed.
A good discretionary trader is so "in tune" with the market that he
may not even notice its character changing, and may not think about
the changes he makes to his approach. It all happens subconsciously
as the trader flows with the market. I doubt ANY successful trader,
discretionary or no, can succeed for long without rolling with the
market's punches.
A mechanical trader's system is cast in stone, so he can't "fudge"
his approach without being aware of it. A mechanical trader may be
more susceptable to market changes, especially if his system does not
adapt. I'd believe that mechanical traders have to spend more time
refining and adjusting their approaches, especially since they then
cast those approaches in stone and expect them to work without ANY
changes.
On the other hand, a mechanical trader doesn't have to spend his time
staring at screens during the trading day, because the system does
that for him. A mechanical trader doesn't have to spend time
watching the pre-open, or trying to decipher news events, or doing
many of the other activities that occupy a discretionary trader's
time. Different approaches pay their dues in different ways, but
they all pay their dues.
Gary
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