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I believe that discretionary trading is better than systematic trading
I know systematic trading can work. A lot of Hedge Funds like Quants and CTAs like Trend Followers religiously are systematic traders and I see that it is possible. I have one quite systematic strategy and it's just easy and comfortable to trade it. But as someone who is searching for profitable strategies for more than 4 years now, from my experience finding inefficiencies in the market that you can exploit with a systematic strategy are insanely hard to find. And the biggest problem is that systematic edges often vanish over time because market behaviours will change and you have to trade that strategy with no edge for quite some time till you have collected the data that proves that the edge vanished. But until then you probably lost quite some money. My latest and now main strategy is quite discretionary and this was something I wanted to achieve for quite some time. The wish of me building a discretionary strategy comes from the simple realization that markets are dynamic, markets change and good setups don't look the same all the time. So having a system that is dynamic so it can adapt to market behaviour and context is a big advantage in my opinion. It is a lot harder because you don't only need to gain experience with a strategy that is much more complex to learn than a systematic strategy, but it forces you to learn to read and interpret market context. And I underestimated how challenging that is and how much time it takes to learn it. I had to experiment, test and put a lot of effort into my research to figure out how I can do it and from that time my appreciation and passion for fundamentals, sentiment and news has arisen. I know there are people out there who are profitable trading mechanical strategies and there is a big advantage in trading them, a far smaller room for errors and they are less of a challenge for your psychology. But you are literally trying to solve a multidimensional problem with a one dimensional solution. I think a skilled discretionary trader can work out on average higher probabilities than most systematic traders because by definition you take a lot of bad trades that could be eliminated by reading context. I think in trading the easy solutions have a high probability of failling. Most traders fail so doing the things that most people don't want to do, go the challenging route, is probably the right way. And in my opinion that is becoming a discretionary trader and learn to read the market instead of following a simple set of mechanical rules. I am still learning and testing my discretionary strategy but I can already see and feel the advantages and I believe if I gain experience with this strategy over 1- 2 years and refine it, then this could not just make me proftiable but give me far above average returns. I know this is quite controversial but I am super interested to hear your opinions on that matter and start a discussion. And I believe this is something a lot of people and especially beginners haven't put enough thought into and so I want to inspire some of you to get down this rabbit hole4
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