Is having a defined trading system so important?? | Forex Factory

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Is having a defined trading system so important??

  • #1
  • First Post: Nov 26, 2005 4:57pm Nov 26, 2005 4:57pm
It was very hard for me to answer this question... I'm demo-trading for more than six months till now, I've tried three different systems (all home-grown ), each of them turned out to be non-profitable ...

Then, I stopped using systems and started a discretionary way of trading... Everyday, I plot my lines and fibos, analyze my indicators, then decide the direction I'll trade,and await for the prey...

Not using a specific method for entries or exits as crossovers, mathematical formulas, rebounds, candle formation or anything else, I just trade depending on what I feel is most probable using any of the mentioned methods... At last, I'm gaining a decent amount of pips...

Do you think a defined system is better for the long run, or I can continue my way trading discretionarily???
  • #2
  • Nov 26, 2005 5:25pm Nov 26, 2005 5:25pm
Quoting meedo29
It was very hard for me to answer this question... I'm demo-trading for more than six months till now, I've tried three different systems (all home-grown ), each of them turned out to be non-profitable ...

Then, I stopped using systems and started a discretionary way of trading... Everyday, I plot my lines and fibos, analyze my indicators, then decide the direction I'll trade,and await for the prey...

Not using a specific method for entries or exits as crossovers, mathematical formulas, rebounds, candle formation or anything else, I just trade depending on what I feel is most probable using any of the mentioned methods... At last, I'm gaining a decent amount of pips...

Do you think a defined system is better for the long run, or I can continue my way trading discretionarily???
I am a newbie to trading, but it sounds to me like you have discovered "your" system that works. Or at least your first one. What works for you is what counts!

Well, demo your feelings for a while and see how it goesl

Good Luck!

P.S. You might want to check out all of Isotonics posts, he is great at drawing lines, seeing triangles, breakouts, etc. (but you already know that of course)

Jimmy
  • #3
  • Nov 26, 2005 8:32pm Nov 26, 2005 8:32pm
It's all about personality Meedo, your personality and the market personality. It's like a match between both. The market simply didn't accept the ways you were approaching it with..Think of the market as your wife, or the pair as your wife, she can give you everything you want, only if you are appraoching her the way she likes...Women have different personalities, and what might work today, might not work tomorrow...

Sorry, I couldn't find a better similarity but this one, but I think it fits..lol...


Thanks,

Nader
  • #4
  • Nov 26, 2005 10:40pm Nov 26, 2005 10:40pm
Quoting narafa
It's all about personality Meedo, your personality and the market personality. It's like a match between both. The market simply didn't accept the ways you were approaching it with..Think of the market as your wife, or the pair as your wife, she can give you everything you want, only if you are appraoching her the way she likes...Women have different personalities, and what might work today, might not work tomorrow...

Sorry, I couldn't find a better similarity but this one, but I think it fits..lol...


Thanks,

Nader
Well Nader, if you put that way, the solution is simple. If what used to work doesn't work anymore, ditch the wife or pair and find another one.
"Do or do not. There is no try" ~Yoda
  • #5
  • Nov 27, 2005 12:00am Nov 27, 2005 12:00am
i think even if you are a discretionary trader you still need some kind of "system" or frame work for your trading.

all of my discretionary trades follow some very flexible rules, but there are rules to my trading. discretionary trading is heavily reliant on the trader having discipline, so the rules are usually devised just to keep you on track with your plan, however loose it may be.

so i would say yes, having a defined trading system is VERY important.
Relax and be happy.
  • #6
  • Nov 27, 2005 7:38am Nov 27, 2005 7:38am
Quoting Pip Daddy
Well Nader, if you put that way, the solution is simple. If what used to work doesn't work anymore, ditch the wife or pair and find another one.
Ya, you can do that, but you already knew many things about the old pair (wife) so when you change the pair (Wife), you will need some more time to understand what's going on..lol...


Thanks,

Nader
  • #7
  • Nov 27, 2005 8:21am Nov 27, 2005 8:21am
As the late Mr Miyagi said: “Daniel-san, must talk. Man walk on road. Walk left side, safe. Walk right side, safe. Walk down middle, sooner or later, get squished.”

My view chimes with Merlain and Narafa. Find what works for you, find what feels best in your heart and mind and focus on it with an obsession.

Some people don't have the patience for long-term trading. Others hate the heat of short-term trading. Some create automated rule-driven systems. Others are purely discretionary. There is no right way. But you must choose a way, a defined way. Rules can be loose or rules can be tight, but you must know where you stand. I write my rules down, otherwise I would forget things (sometimes conveniently).
"Always bet on black"
  • #8
  • Nov 27, 2005 4:30pm Nov 27, 2005 4:30pm
Thanks all, I think you wanted to say that I can trade discretionarily but I must abide to some defined rules (what Merlin called a framework)...

Discussing these rules, I think they should inculde: Wise MM, pre-defined stops, reasonable R/R ratio... Any more rules to be followed??
  • #9
  • Nov 27, 2005 10:58pm Nov 27, 2005 10:58pm
The main benefit of having a trading system, is it provides a framework for you to follow, and, ideally takes the emotion out of trading. If you have been trading virtually up to this point, you have not felt the true pressure of trading with your hard earned, that can only come with live trading.

A trading system, that provides some flexibility but defines some very clear rules of when NOT to trade can be very useful for traders of all experience in my opinion. Chances are you have already accidently created that system already, my advice would be to make sure you write down what you do right, wrong etc. each trade, so that when things start going wrong (they always do at times) you can refer back to what worked.

Best of luck
You can quit and they won't care, but you will always know.
  • #10
  • Jul 23, 2010 4:01am Jul 23, 2010 4:01am
Trading on what you feel in that moment, as you might have seen during the months that have passed, since you opened this topic, could be very, very destructive.

Why I think a strategy, technique, or call it however you want, it is important is, because lacking a model to follow in your trade involves a grater percentage to failure because your limits are practically infinite. So when do you take your profits or your losses?

Secondly, testing something after just few months on demo trading is equal with zero. Without solid knowledge to make a solid base for your "frame" you cannot even evaluate your chance of survival in the market, not profiting from it in the neat term future.
  • #11
  • Edited 11:36pm Jul 26, 2010 10:17pm | Edited 11:36pm
Quoting meedo29
It was very hard for me to answer this question... I'm demo-trading for more than six months till now, I've tried three different systems (all home-grown ), each of them turned out to be non-profitable ...

Then, I stopped using systems and started a discretionary way of trading... Everyday, I plot my lines and fibos, analyze my indicators, then decide the direction I'll trade,and await for the prey...

Not using a specific method for entries or exits as crossovers, mathematical formulas, rebounds, candle formation or anything else, I just...
You need somekinda of rules to protect yourself from human fallacies. e.g. "Hey, I been trading this setup for month with 90% accuracy, why not I bet 30% of my account now this is the first and the last time I'd bet this much."

*poof* ... margin call ... LOL
  • #12
  • Jul 26, 2010 10:33pm Jul 26, 2010 10:33pm
this threads 5 years old where do people dig up this shit

Good question though: Id say depends on what you mean by "system"

System to me suggests a mechanical trading strategy. I used to ask myself if my "system" could be programmed into an EA and if the anseer was yes i knew I needed more.

I bet a lot of people trade red light green light systems successfully but I would also guess that they are more experts in money management than trading. In short they should prob just go to the casino and cash in there - at least it would be more fun and I hear the comps are good too!

I think the most important aspect of trading is definetly to have a defined method - you need to know what you're trying to accomplish and why it will work or fail and this also helps to take as much emotion and rash decisions out of it as possible, but at the end of the day trading involves some invested thought or else your just gonna follow the rest of the losers to the slaughterhouse.

Short answer: No
Time hides Nothing
  • #13
  • Last Post: Jul 26, 2010 10:33pm Jul 26, 2010 10:33pm
As long as you're not just pulling the trigger to pull the trigger, discretionary trading is fine. When you get right down to it, discretionary trading is nothing more than using your own judgment, rules or ability to decide (discretion). So although most of us "say" we have a method or predefined set of rules, it's our ability to decide or judgment (discretion) that we learn over a period of time that enables us to pull the trigger on a certain trade.


Edit: way to go guys, rehash a blast from the past. I didn't notice the date on the original post, just the couple above me. lol. Hopefully the above responses will help one of the newer traders.




Quoting meedo29
It was very hard for me to answer this question... I'm demo-trading for more than six months till now, I've tried three different systems (all home-grown ), each of them turned out to be non-profitable ...

Then, I stopped using systems and started a discretionary way of trading... Everyday, I plot my lines and fibos, analyze my indicators, then decide the direction I'll trade,and await for the prey...

Not using a specific method for entries or exits as crossovers, mathematical formulas, rebounds, candle formation or anything else, I just...
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