There are two main types of traders in the financial markets…discretionary traders and system traders. A discretionary trader will apply any approach that they see fit for the current market conditions while a system trader will use a defined set of rules to identify trading opportunities. I think new traders should learn as much as possible about fundamental and technical analysis, but should be thinking about developing a set of rules to determine when to trade.
The advantage of the trading system more discretionary trading is that emotions do not have the same influence on the decisions that managers make, because the entry and exit rules are clear. Discretionary traders will react to current market conditions, but rarely can react the same as for transactions in a row, increasing the risk of bad decisions by less experienced operators.
In addition, merchant systems can go back and see if the rules which they intend to use their trading decisions are sufficient to lead to profitable trading for a number of shops. If so, then it has only system vendors to ensure they are taking jobs in their system to identify and to ensure that they take the rules. This can lead to consistent results and easier to do business for a few more losses in a row. After all, you have the historical results to back up your trading decisions.
No comments:
Post a Comment