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Mechanical System - Emotions Discussion

  • Post #1
  • Quote
  • First Post: Edited 6:42pm Sep 30, 2009 6:12pm | Edited 6:42pm
Everyone is different and we all know psychology and human emotions is a big part to succeed in trading.

Since i fail miserably with controlling human emotions i seem to fail with any system that involves human discretion. Now i am at the point to either stop pursuing a trading or try to work on creating a mechanical system.

What do you guys think? Have anyone built a good mechanical system? is it worth pursuing that path?
It is an important step to realize that one cannot control their emotions, I also realized this pretty early on. Mechanical systems are totally worth pursuing but you are not going to find anything being given away on a forum, it's lots of hard work I'm afraid to build anything worthwhile, check out the 'Systematic Trading' thread.
The breaking of a wave cannot explain the whole sea.
  • Post #3
  • Quote
  • Edited 7:44pm Sep 30, 2009 7:27pm | Edited 7:44pm
I agree with Craig. A good place to start is with opening session breakouts. There are some good threads here. Maybe also inside bar trading because it can be used in conjunction with breakouts, check the dibs thread. These type of methods are good because they can be traded mechanically and it's hard lose alot of money if you follow the systems and use proper money management.


Just wanted to add, keep in mind that the profits/losses will come from the exits more so than the entries. All my entries in trading are mechanical but my exits are discretionary.

Also although i wont take any trades that don't follow my rules, sometimes i wont take trades that do follow the rules. If there is some confluence against the trade, say strong resistance close by and against the trend etc i will pass on trades sometimes. Or if there is a news realease coming out. I guess it's a little bit more descretionary than i thought.
Quoting Craig
It is an important step to realize that one cannot control their emotions, I also realized this pretty early on. Mechanical systems are totally worth pursuing but you are not going to find anything being given away on a forum, it's lots of hard work I'm afraid to build anything worthwhile, check out the 'Systematic Trading' thread.
Thanks for the answers. I am ready to put the hard work but didn't want to do it unless there is a light at the end of the tunnel
  • Post #5
  • Quote
  • Edited 9:54pm Sep 30, 2009 9:18pm | Edited 9:54pm
I'm not truly trying to be negative because I think research and hard-work pertaining to building a mechanical system is educational and rewarding...

that being said...

The same pitfalls of emotion exist when using an automated or mechanical system. For example, if your system experiences a string of losses (within normal probability) will you be able to resist the temptation to tweak it, take it off-line, etc?
It seems as if you care about improving your trading...it may be hard to be less involved in the actual process (converting to mechanical or automated processes). It was hard for me.
Quoting Intu
I'm not truly trying to be negative because I think research and hard-work pertaining to building a mechanical system is educational and rewarding...

that being said...

The same pitfalls of emotion exist when using an automated or mechanical system. For example, if your system experiences a string of losses (within normal probability) will you be able to resist the temptation to tweak it, take it off-line, etc?
It seems as if you care about improving your trading...it may be hard to be less involved in the actual process (converting to mechanical...
the moment i read ur answer i smelled an experienced trader ...

the moment i read ur profile i knew i was right.
Quoting Intu
The same pitfalls of emotion exist when using an automated or mechanical system. For example, if your system experiences a string of losses (within normal probability) will you be able to resist the temptation to tweak it, take it off-line, etc?
These are good questions, the answer for me was to automate all of it, the tweaking, position sizing, the stopping & starting of systems. Obviously one can never completely divorce one's self from the emotions which surround trading, but you can remove the majority of temptations. One thing that I find happening over time is that it becomes easier to be objective in a dispassionate way, I actually find this spilling over into other areas of my life.
The breaking of a wave cannot explain the whole sea.
  • Post #8
  • Quote
  • Last Post: Oct 1, 2009 1:41am Oct 1, 2009 1:41am
Quoting Intu
I'm not truly trying to be negative because I think research and hard-work pertaining to building a mechanical system is educational and rewarding...

that being said...

The same pitfalls of emotion exist when using an automated or mechanical system. For example, if your system experiences a string of losses (within normal probability) will you be able to resist the temptation to tweak it, take it off-line, etc?
It seems as if you care about improving your trading...it may be hard to be less involved in the actual process (converting to mechanical...
With mechnaical atleast you can backtest it quite well and if i go live with the system we will now what kind of losses it will make. This is something that missing with the system that needs discretion.
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