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Not at all. Discretionary trading is an attempt to use human cognitive ability in agalog pattern recognition.
That's what we are good at.
I think that trying to automate is aking to attempting to write your own algo to compete vs established chess programs instead of improving your own chess skills.
What LastDino says is true. It seems that many discretionary traders believe I am referring to HFT. I am not at all. All I am referring to is creating automated strategies, in my case using BlackBird, to create trading scenarios, exactly as an indicator-based discretionary trader would do, then allowing the computer to automatically enter the trade. Depending one one's objective, these bots could be trading 1-minute bars (not me) to daily bars. In my case I am using 2500 tick charts on MNQ or 1000 tick charts on MES futures contracts. If the last 2500 tick bar meets the entry criteria, then the trade management software, Blackbird in my case, executes a stop limit order 2 ticks above the high of the signal bar.
Just like discretionary trading, I have established the rules of the trade beforehand. The major difference is that while discretionary traders can use judgement and visual input to make their trades, computers cannot. But using computers can have some advantages.
Since the computer has no judgement, you must fully establish your trade parameters prior to the trade. All traders should be doing this, but many don't, although they think they do.
Since the trade parameters are established prior to the trade, there is no emotion involved in the decision making.
The computer can react to market signals faster than we can manually.
The computer does not second guess the execution strategy, but of course you can. It still requires discipline.
The computer will not make errors unless they are programmed into the strategy
The computer cannot fudge the results in live trading by bending or ignoring the established rules of the trade.
The computer will not modify trade management parameters like stop or profit targets unless you tell it to. Of course you can override the computer, but it requires knowledge of forethought.
One negative to computer trading vs. discretionary trading is that a human can recognize patterns while a computer cannot. This is a disadvantage vs. an knowledgeable discretionary trader. I see it as actually an advantage over the novice discretionary trader, since it has been shown that the human mind tends to see patterns where none exist.
Since I am not attempting HFT, or even scalping, on my timeframe speed of execution, location of the sever, and the ability to trade on news feeds is no more important to me than any discretionary trader on the same timeframe.
I think your underestimating how long it will take to make a automated strategy. I worked for several years and the best I could get was break even. From what I have seen from being here on FIO for 9+ years this is the norm. Very few if any ever make it. From what I observed outside of FIO you need to be well funded with a team of coders to make it long term. IMO - your time and effort could be better spend learning a different trading skill. Personally I would suggest options. If you know how to read a chart you can make money in options.
Thanks for the recommendation, Robert. I am open to all ideas, and can incorporate more than one idea. I have traded options before, and there are certainly more intricacies than simply buying or selling a futures contract. Are you referring to trading calls and puts based on the underlying chart, writing calls, or more complex combinations?
I started out with defined risk trades such as vertical spreads and iron condors. I am starting to get into strangles and straddles. The writing of calls requires to much risk IMO. The idea is to trade small and trade often and create a money stream. What I love about options is you have time to react rationally. With the proper setup of positions you can make money regardless of which way the market moves. Feel free to check out my journal and reach out with any questions. SD’s Option Journal
I'm happy bachelor, but yeah, its difficult to get wife or even girlfriends who agrees to all this, if you managed it then good on you
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"Be an observer, You are not your trading performance, Stop thinking so much, Eliminate/reduce social media activity, Accept the randomness" - Josh
I agree that position sizing and portfolio risk management are required for trading success. However, to trade frequently, as retail, is generally not a winning proposition. This is validated by academia and practitioners cross-asset. The transaction costs (commissions, exchange fees, bid-ask spread, etc) have a significant adverse effect on PnL over time.
People that tell you otherwise probably are recipients of commissions and/or rebates based on your trading activity.