Think Discretionary, Act Systematically

There is always this fight about discretionary trading and a systematic trading approach. What’s better? We all know that there are more profitable systematic traders than discretionary traders. We have to look at the Robbins World Cup Trading champions to understand that it is probably easier to make profits with a systematic approach: all of them use mainly trading systems. So, am I naturally a systematic trader? Nope!

I need you to follow me: a talented trader can beat a systematic trader as long as the talented trader is able to have patience and be disciplined. But that’s the problem: patience and discipline are virtues mostly disappeared by now. You can look anywhere around you; discretionary traders are not able, most of the time (almost in any case), to show proof of being profitable. Maybe they are very good at analyzing the market, and finding edges… they are talented, but not disciplined and patient.

I’d like to be here to tell you that I am a talented trader with patience and discipline; unfortunately, I am not patient, I have no discipline, like 99.9% of the people who approach trading. But I am a talented trader, I know it (I have proved it in the past with Account Statements). But here the problem is another one, please follow me: how can I take advantage of my talent without being able to be disciplined? Just an example: at the end of 2023 I forecast in my 2024 Corn & Soybeans Forecast and Strategy Bulletin that the Grains Market (Corn, Soybeans, and Wheat) had to start a new downtrend in May 2024, and I have practically nailed the exact Top of Corn and Soybeans inside a three days’ time-window.

That’s talent (and knowledge). But this is useless if, when I open the SHORT position and I have a profit of 30 points, then I fear losing that profit and I close the position. Grain prices are dropping heavily now, as my forecast suggested, with the soybean price down over 150 points. So, my talent made me forecast a big trend, but my discipline made me take just a little profit. It happens all the time with discretionary traders; then, when the forecast is wrong, we take a big loss because we are not able to accept being wrong.

This is the never-ending problem of the discretionary trader; we always say to ourselves that we will not make the same mistake next time, but then we always do it, and the loop goes on; at some point, it seems practically impossible to avoid the same mistakes that we perpetuate. We have two solutions now: or we give up on our talent, and move all our attention to the systematic approach, or we can accept our limits and find a solution for that specific problem, and that’s the solution I adopted (I do not give up to my talent 😊). I can take advantage of my talent, but I can create an approach that allows me to avoid my inability to be disciplined. Ergo:

I think discretionary, but I act systematically.

What does that mean? To understand it, I have to explain my case: I have started my interest in trading through people like Gann, Bayer, and Baumring (most of these Courses can be found on https://sacredscienceinstitute.com/, including mine) all people who focus on the forecast side and cycles. I spent about 15 years studying it, and I think I have developed a “talented” approach to forecasting the market. But I honestly have to say that it was not enough to turn me into a profitable trader. Probably my background made me approach the market in the wrong way: I thought that if I knew how to forecast the market then it was enough to make profits; I was wrong.

At this point, with all the frustration of having wasted years of my time studying something that was useless for my attitude, I made just a little change. I created systematic intraday rules on how to open and close positions in intraday, according to specific Key Price levels that I selected from the analysis of the market. I was always studying and using my timing models to increase the probability of riding the correct trend at the right time (see the Soybeans chart above, for example), but I could not trigger the trades with a discretionary approach; that part had to be automated; I was not able to stand the stress of following the market all day long. With this simple change, my trading approach became immediately profitable. So, if you like studying and analyzing the market, and you think that your way of perceiving the market can make a difference, but you still are struggling to make a profit, the best advice I can give you is to simply automate your entries/exits. That’s what I did, and it worked for me. I am not saying that you have to create a trading system, but simply you activate the strategy when you think it is the time and the price to ride a new swing.

I had to adopt this approach also for family reasons: until I was a young single guy, I could spend all my time on the PC; but now, with two children, and trading the US Market from Italy, I cannot stay in front of my monitors every day until 10 PM, Italian time. I have created a CODE to allow me to trade without staying in front of the PC, and all my subscribers to the Daily Report Service have access to the same rules to trigger the trades, and it is also available the CODE I use for trading (it works in MultiCharts or Tradestation).

If you want to take advantage of this trading approach where I study every day the market with a discretionary analysis, and then I activate my strategy with the parameters that my strategy suggests, you can contact me at info@iaminallstreet.com, or directly subscribe to the Daily Report Service.