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With the advancement in technology and improvements in trading softwares, many intraday traders are now automating their trading. There are advantages to this... emotions can be eliminated (not completely but more than discretionary) and traders can use mechanical exit points. Example: scaling out at +10pts on every trade.
As a pure discretionary trader, I still believe there is an edge in discretionary trading. Intuition comes into play as well as better entries. Why better entries? If one is a good tape reader he can pinpoint his entries and take minimal heat. This can save a trader a ton of points in the long run.
I have a couple questions regarding this topic and could use your guys opinion. Do you think discretionary traders enter before automated traders? What are your thoughts on discretionary vs automation? What type of trader are you and which one do you prefer?
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Soultrader, I'm relatively new to trading (less than a year). I have made a decision to be a discretionary trader. I trade forex, using only price, candlesticks, support and resistance. Looking for breakouts of channels, consolidations and trendlines on longer term charts, then taking the signal in same direction on an hourly chart. More or less this is my style of trading so far.
I read everywhere that backtesting is essential to succeed. As I mostly trade off price patterns, how can I backtest? If I can't backtest how can I put together statistics like, percentage winners, losers, drawdown etc.
Any answers greatly appreciated.
Thanks,
Soultrader