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Hi everyone,
I mean no offence, and hope that no-one takes anything personal below..
Anyone who claims they can automate any discretionary trader has an
inflated opinion of themselves. Remember always, we are only one
trade away from humility.
At 11:59 AM 12/7/99 -0600, you wrote:
>>>To sum up the claim of discretionary trading is just an excuse for
>>>inadequate programming or a feeble attempt to disguise a non existent
>>>trading method.
>>> Mark Brown
>
>NH> Hey guys,
>
>NH> This is the funniest thing I've read in a loooong time!
>
>NH> Almost all of the successful traders that I know are NOT
>NH> mechanical traders, and they don't believe in mechanicaltrading.
>
>NH> Mechanical trading can work too, but some methodologies
>NH> (discretionary) cannot be automated.
>
>I would go further to argue that I have never seen a discretionary
>trader who I could not (in time) capture totally in code.
You are kidding, right? I doubt that anyone (and I mean even really
good programmers - I've met some <wink>) could define a system that
would identically make the same trades that I make in any one month.
Why? I just gave you an example below. I doubt that I could in time
define everything that could possibly effect a trading decision. Just
the major rules could be documented. If you could code everything, you'd
have a discretionary system, not a mechanical one. What's the point of that?
I already have a discretionary system!
I have never met a programmer who could replace an entire human with code.
I have
never met a car that could drive me across the country with no human input.
It would probably stop at the washroom at the wrong time (not knowing that
my kid
faked it in his last potty-break), it would probably not determine
when to heed the back seat driver JUST TO KEEP THE PEACE SO I CAN GET SOME
TAIL TONIGHT! Hahahha! So a car could not be automated to duplicate
the living breathing trader-driver with an appetite.. This trader needs
to get from A to B and enjoy it, not just get there. Trading is the same.
Cars cannot quantify every real-world input, nor can mechanical systems.
>NH> Just one example, very few mechanical systems take into account that
>NH> Greenspan is about to make a speech so your indicators should not
>NH> be trusted..
>
>You just have never experienced a system that takes into account
>Greenspan. He can be taken into account by not taking him into
>account. In other words, if that noise effects you trading then you
>are obviously worried about something that is out of your control. You
>can not participate and expect to win another mans game. Your concept
>of reality is skewed by short term price movement that you would have
>to be a pit trader to take advantage of.
You can't program to measure noise before it exists. By the time you have
measured the noise, the damage to your trading account has already
occurred.. A discretionary trader can determine when NOT to trade before
the day turns sour..
This is why so many traders abandon mechanical systems at
exactly the wrong time. Mechanical systems usually do not see their
signals within the context of the real world.
Just at the time that mechanical traders are quitting their system,
discretionary traders are snapping up cheap positions during the panic..
The difference is that mechanical systems are measuring the past, while I am
predicting the future. There are many examples of this. I fade the
Stochastic so
often, because I KNOW the mechanical traders are following it.. <GGGGG>
Every Stochastic signal is not the same, is must be seen in context,
because there is much profit to be made fading the common Stochastic...
This is why discretionary traders can reach a very high percentage of
winners, while the mechanical traders so often have to "take every signal"
in the hope they get the big winning trade which makes up for all
their prior losses..
A good trader's best tool is his brain, why turn it off? Very few traders
have
the emotional discipline to trade a mechanical system through it's inevitable
run of bad trades.. Particularly if it's not your own system, if it's
a system that is not based on sound (even discretionary) strategies that
you have
proven to yourself. It takes enormous (superhuman) discipline to trade
someone else's mechanical system, most traders should avoid mechanical systems
for that reason alone.
I'll repeat what I said before:
Beware of Mark Brown or anyone else who tries to shove black-and-white
absolutes down your throat. Keep an open mind! No-one can claim to
know the absolute truth. Anyone who claims their way is the only way,
is probably scamming you, and could be doing you a severe disservice.
It is possible to be a VERY successful discretionary trader, and it is
possible that programmers cannot automate many discretionary methodologies.
It is even possible that a mechanical system can make money, sometimes.
But it is extremely unlikely that a programmer could write code to
duplicate this discretionary trader, and many of the successful traders
that I know.
Do not be a sheep, question everything..
Respectfully,
-Neal.
PS. This has been fun! I was a programmer in my prior life, so I
know what's realistically achievable <wink>.. I've probably said
everything I need to on this topic, so don't expect replies...
Besides, why pollute the list?
-----------------
Neal on the 'net.
Trade well. Train hard.
http://www.halcyon.com/neal/
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