Discretionary vs Mechanical Trading
Let's talk about real fucking edge which seems to be completely alien to crypto trading groups that I have joined. Majority of traders just brag about their indicator knowledge that really means nothing in the long run.
Whatever indicators, charts, or strategies you use. You should only view them as your tools. Your tools alone are not going to do the work for you. It’s like a carpenter with a box of tools. Yeah, you can have particular tools that get the job done more efficiently. But ultimately these tools can only amplify your skills - They are not enough to do the work for you. They lack the discretion. The subjective action.
Furthermore, the narratives we use around tools and indicators are only useful to help us understand what’s happening at a basic level, however often times its very far from what is actually happening. Orderflow traders are often prone to falling in this hole, since they take the time to find meaning behind every single transaction. In reality, there are millions of transactions taking place - forming a market. Participants interacting with a variety of outcome intentions depending on their own personal reasons for wanting to make a transaction.
For example, is a large seller in the market indicative of bearishness? What if their intention was to just slightly adjust the exposure on an already well-established long position? Or perhaps they are just unloading to loosen some liquidity and don’t care about the friction they are causing.
These are the types of nuances and combinations of interactions that you are trying to use indicators to illuminate. In reality, the only thing that matters is - is market behaviour measurable? Does the market behaviour provide a distribution of outcomes that are skewed in probability? Can you form a business process that exploits that distribution repeatedly?
Blah blah I’m going on a tangent here. The point is you have the ability to be discretionary on your executions and filter out unnecessary bullshit. Stop blindly relying on an indicator and WORK ON YOURSELF.
Get to testing, You are a science experiment.
Each trade you make you can collect another sample on yourself. Use discretion, yes, but only to complement any systematic edge that your tools provide, not as a Omnipotent force.
As the teens would say, don’t get lost in the sauce. (Am I young yet?)
"Imagine forming a “rule-based system” that does not allow for any discretionary input. You might as well just be an algo executing orders. Likewise, being all discretion and having no statistical edge is just as poor. You might as well just stick to doodling Elliot waves."
