[Dogpile]

not sure I understand what you mean:

<<Unless your mechanical strategy's rules are based on the same assessment as your discretionary strategy, then you're comparing apples and pears. They have two different structures viewed by two types of technical analysis. >>

there is one structure but it is being defined by the mechanical rules.

for example, I see this pattern over and over again. the market closes low (or high) in its daily range, it will very often make a lower low (higher high) the next day followed by a reversal in the morning session. let's just say this is a tendency. ok, what defines a reversal? well, its pretty ambiguous...

you can do an average true range function and if it goes X true ranges off the lowest low, than that is a reversal. now you can test for this mechanically. that is your structure. doesn't mean that if it goes X true ranges off the low that it is a profitable trade, it just means you have defined that to be a reversal and anything less than that is not a reversal. this is a consistent structure. if it doesn't go X true ranges off the low, then it was never a reversal, despite you thinking it was going to do that (your discretionary thinking at the time). so long as you are playing for reasonable profit targets, you should be ok. if it is a reversal, you will make your profit. if it isn't a reversal but flushes in that direction, you may make your profit anyway before the reversal fails. if it starts to reverse but then fails before hitting your profit target, then you lose.

my real point is that you are just trying to find an entry/exit technique that is reasonably good statistically -- on a lower timeframe. the money-making will not come from this technique, it will come from your proper identification of the higher timeframe structure. I say this because after you write a simple mechanical strategy, very often you can see tons of trades that are clearly stuck in some range that you can easily discard as you never would have taken these 'signals' (this happened today, Friday). yes, some of your discards will be bad as they will break out of the range on that signal --- but that is similarly true if you are just discretionary trading.

just a little confused on what you meant by saying they have 2 different 'structures.'