Oh God, another question for me. I just can take this anymore ! Trading is indeed the hardest job one can do. I should have tried to become a rockstar.
So, here we go: Am I a judgmental or a non-judgmental trader ? I'll try to answer this question over the next few weeks, but first of all:
Q: What is judgmental trading ?
A: "Judgmental approaches call upon the trader to make decisions within a given criteria or context, while non-judgmental systems are strictly mechanical."
Here are some advantages / disadvatages ( taken from Joe Dinapoli's book - Trading with Dinapoli levels)
Miths about non-judgmental trading :
- Once you have developed your system, your research and your work is over. Stress is non-existemt since the decision-making process is out of your hands
- You don't have to monitor the markets anymore.
- The system can generate an adequate income flow which will enable you to go to Fiji :)
The reality :
- The work never ends. Your system will exceed the historical extremes ( discovered by back-testing) and you start "massaging" the parameters. In fact, you should have 2, 3 or maybe more systems. Then, regarding the stress: you will feel it when your system will dictate absurd orders.
- Your system will start missing some big moves
- It's hard to get enough capital to fund four systems over a number of futures contracts.
Miths about judgmental trading:
- You achieve a 90% win ratio
- You live where you want, trade where you want
- You turn a modest amount of money into a veritable mountain of pure finacial muscle.
The reality:
- You learn from a pro, then from another, and although you find some real benefit here and there, you're just never able to achiever quite what you expected.
- If you can't find a way to get profitable, your savings will be gone and you start wondering if you will become someone else's employee.
- You will be constantly focusing on the markets. You'll never get to Fiji, actually you'll start wondering " Is there a contract on Fiji ?"
