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I am sure that this topic has been discussed here before, but I have been giving this question some serious thought recently. Ideally of course the best trading systems will use both mechanical and discretionary element. But from the point of view of a newbie, what is the best way to start trading forex. Do you try to find a mechanical system that works for you (keeping out emotions), or do you try to hone your "market sense" and trade with your gut?
Unless youre really smart (and remember by definition 50% of people are below average intellegence), I would suggest discretionary is the only way to go.
Unless youre really smart (and remember by definition 50% of people are below average intellegence), I would suggest discretionary is the only way to go.
?????
He say "for newbies". Discretionary means that you trade involving your emotions. Even seasoned traders can't completly control emotions and that's one of the most frequent causes of bad trades.
Forex is discipline, knowledge, hard work and patience. If you find a good mechanical system that suit you (many good here to choose), demo trade it first for at least 3 months. When you find youself consistenly wining and feel confortable trading it, you can try with (little) money.
By that time, you will notice you have gain more discipline and patience and, if you are smart and good worker, more knowledge too.
Learn from the masters here. Some of them are very grumpy (be careful with your questions to them, do your homework before asking coz they hate lazy questions), but finally they agree to help. Good people.
Welcome to Forex and good luck, viv_1612
I don't really believe discretion is trading with your emotions. Discretion is being able to deviate from set rules because of a particular thought process.
This particular thought process does not necessarily mean that it is based off emotion, but could be based off probabilities of what the trader believes will happen.
Quote:
Originally Posted by fxnewbie
?????
He say "for newbies". Discretionary means that you trade involving your emotions. Even seasoned traders can't completly control emotions and that's one of the most frequent causes of bad trades.
Forex is discipline, knowledge, hard work and patience. If you find a good mechanical system that suit you (many good here to choose), demo trade it first for at least 3 months. When you find youself consistenly wining and feel confortable trading it, you can try with (little) money.
By that time, you will notice you have gain more discipline and patience and, if you are smart and good worker, more knowledge too.
Learn from the masters here. Some of them are very grumpy (be careful with your questions to them, do your homework before asking coz they hate lazy questions), but finally they agree to help. Good people.
Welcome to Forex and good luck, viv_1612
I don't really believe discretion is trading with your emotions. Discretion is being able to deviate from set rules because of a particular thought process.
This particular though process does not necessarily mean that it is based off emotion, but could be based off probabilities of what the trader believes will happen.
I don't really believe discretion is trading with your emotions. Discretion is being able to deviate from set rules because of a particular thought process.
This particular thought process does not necessarily mean that it is based off emotion, but could be based off probabilities of what the trader believes will happen.
I don't really believe discretion is trading with your emotions. Discretion is being able to deviate from set rules because of a particular thought process.
This particular thought process does not necessarily mean that it is based off emotion, but could be based off probabilities of what the trader believes will happen.
Yeah, shure...
But here we can end talking about "thoughts process" and "beliefs" and (again) we will probably discover that emotions are, in fact, involved in that decission. Funny. If the decission was right, then we can claim that obey to a particular and logical reason (not emotion). If not, we can can allways say that it was because we don't obey our trading rules (lack of discipline). Never ending discussion.
Of couse that discretion (as you define) is involved in a trading, based in a high probaility news release in one way, or a particular formation of candles, or a repeated pattern in that particular pair, or...... anything you "believe" (faith that will happen), and probably will usually happens in that way. But shit happens too.
I think that is not the pourpose of the question of viv_1612. I think that he is asking if ("for a starting newbie") a mechanical system is better that using "guts". My answer was in favor of a mechanical system, at least for a starting trader. I don't know if is any trader here that trade with his guts and is consistently profitable, but I see many using mechanical system doing a good job.
If a trader has the proper capabilities to control there emotions, their ability to trade with discretion is just another term for a mechanical system with some loose rules.
These loose rules are used in periods in which the trader, through experience, understand a particular situation in his or her system reacts different within particular events. These loose rules can be subjects to shock news event, or conflicting trading theories.
A person has the ability to quantify each trading decision with a weight. Using that weight, the trader has the ability to scale in a bias direction in which the person will choose is the highest probability direction. This will not be in his or her mechanical system, but the system in which his or her discretionary judgment is made is actually a mechanical system on its own.
Do not compare discretion and emotions together, if you do, you can compare it to a person who does not have discipline in trading methods, or management.
When a trader is disciplined and he makes a discretionary decision against his system- he doesn't blame anything. He puts it in his trading journal as a loss, and he moves on.
Quote:
Originally Posted by fxnewbie
Yeah, shure...
But here we can end talking about "thoughts process" and "beliefs" and (again) we will probably discover that emotions are, in fact, involved in that decission. Funny. If the decission was right, then we can claim that obey to a particular and logical reason (not emotion). If not, we can can allways say that it was because we don't obey our trading rules (lack of discipline). Never ending discussion.
Of couse that discretion (as you define) is involved in a trading, based in a high probaility news release in one way, or a particular formation of candles, or a repeated pattern in that particular pair, or...... anything you "believe" (faith that will happen), and probably will usually happens in that way. But shit happens too.
I think that is not the pourpose of the question of viv_1612. I think that he is asking if ("for a starting newbie") a mechanical system is better that using "guts". My answer was in favor of a mechanical system, at least for a starting trader. I don't know if is any trader here that trade with his guts and is consistently profitable, but I see many using mechanical system doing a good job.
[quote=Walander;260572]I still continue to disagree.
-- but the system in which his or her discretionary judgment is made is actually a mechanical system on its own.
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Now you are talking !!!
So it is not completly a discretionary decision as you defined ( thought process, "beliefs"-- sorry, I don't like that word for trading. Maybe "evaluation" is more accurate), but an aspect of a mechanical system ?
"Discretionary", as I undestand, is not a system by itself, nor part of stablished rules for specific situations (if pre-defined rules are followed, then not discretionary). Is a decision based on whatever reason the trader has in that specific moment (including "guts", "though process", "beliefs" and, of course, "evaluation") that disobey pre-stablished rules.
...
A person has the ability to quantify each trading decision with a weight. Using that weight, the trader has the ability to scale in a bias direction in which the person will choose is the highest probability direction. This will not be in his or her mechanical system, but the system in which his or her discretionary judgment is made is actually a mechanical system on its own.
[quote=fxnewbie;260619]
Quote:
Originally Posted by Walander
I still continue to disagree.
-- but the system in which his or her discretionary judgment is made is actually a mechanical system on its own.
-----------------------------------------------------------------------
Now you are talking !!!
So it is not completly a discretionary decision as you defined ( thought process, "beliefs"-- sorry, I don't like that word for trading. Maybe "evaluation" is more accurate), but an aspect of a mechanical system ?
"Discretionary", as I undestand, is not a system by itself, nor part of stablished rules for specific situations (if pre-defined rules are followed, then not discretionary). Is a decision based on whatever reason the trader has in that specific moment (including "guts", "though process", "beliefs" and, of course, "evaluation") that disobey pre-stablished rules.
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