Tag Archives: discretionary vs mechanical trading

The Biggest Variable in Trading is the Trader

Tech issues with my charting platform sent me to my list of non-chart critical backup topics. Before breezing past a non-market topic piece ask yourself, “Am I a discretionary or, mechanical trader?” This isn’t a gray area. Mechanical trading involves following a specific set of rules that has garnered a positive expectancy over the course of time. Discretionary trading is any trading that makes the trader a variable, whether through the interpretation of the signal’s rules, asset allocation and weighting to chart pattern and fundamental data interpretation. Most traders fall into the discretionary category when looked at honestly. This makes the trader the biggest variable in a given investment sector. We’ll take a look at the frailty of the human psyche as well as a perspective that’s ameliorated more than twenty years of trading for a living stress.

Continue reading The Biggest Variable in Trading is the Trader