I was reading the book “Trading From Your Gut”  – which I highly recommend – and the book helped confirmed some ideas that I have had about trading using your intuitions since I started my trading career. You see, when I started trading, the first trading class I attended was presented by Clive – an ex-institutional trader who had 30-40 years of trading experience. On the contrary, if you read Clive’s profile again, you would have noticed a few things about Clive – he has more than 30 years of trading experience, he is a discretionary trader and he “Breaths” Price Action. Think about it, if you were in the class with me, I am very certain that you will have the urge to start trading discretionarily as well.
On top of that, most Master Traders uses a half mechanical and half discretionary trading approach.
My point is this, if you really want to be a successful trader, start trading a profitable mechanical system. Never ever forget that the act of placing a trade is only a small part of trading, the rest is heavily reliant on having a good risk management, low drawdowns and consistency (see related article). If you really think that your analysis is good, then you should consider taking a systematic approach to your benefit your instinct.
When you start trading, it is difficult to differentiate between intuition and recency bias (or what ever bias that it may be).
Don’t get me wrong, but even professional poker players have a system in place, they know exactly when they should or should not play their hand. Because TYE is Still Growing…Sign Up for the newsletter to get TYE’s trading ariticles.
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With an automated trading system, you can define specific rules for trade entries and exits that can be automatically executed by a computer.
Once the rules have been established and programmed, the computer can monitor the markets to find buy or sell opportunities based on the trading strategy specifications.


Because automated trading allows you to keep your emotions in check, you may have an easier time sticking to your plan. Automated trading helps ensure that discipline is maintained because the trading plan will be followed exactly.
Even if a trading plan has the potential to be profitable, traders who ignore the rules are altering any expectancy the system should have had. Automated trading systems allow you to achieve consistency because they will always trade the plan. Since computers respond immediately to changing market conditions, automated systems are able to generate orders as soon as specifications are met.
The theory behind automated trading makes it seem simple: Set up the software, program the rules and watch it trade! In reality, however, automated trading is a sophisticated method of trading that relies on multiple levels of technology. Depending on the trading platform, a trade order could reside on a computer - and not a server. Although it would be great to turn on the computer and leave for the day, automated trading systems do require monitoring because of the potential for mechanical failures, such as connectivity issues, power losses or computer crashes, and system quirks. An automated trading system can experience anomalies that could potentially result in unintended, missing or duplicate orders.
Many of these traders were traumatise by that experience and even decided to seek help from coaches with different trading style. At that stage of their trading career, they were still getting their bearings right and trying to figure out what to do and what not to do. Clive made trading so easy because all he did was talked about Price Action and nothing more – no indicators, no robots and etc.
For Clive, Taking The Money was an integral part of this trading approach and, hence, he uses it very successfully.


When you are start trading a real account, you will soon find that you have a money relationship that is unexplored. However, discretionary trading without any experience is no different from walking into a casino to try your luck. To find out more, join our newsletter today so that you won't miss any Trading Psychology articles.
Although he was teaching us to trade mechanical systems, he was a full fledge discretionary trader.
If your idea has consistently been proven to profitable based on a large sample size, then you have build a mechanical system based on your personal market believe and that is fantastic!! For example, some people freezes out of fear as soon as they place real money in the market even though they have been consistent on a demo account. However, without enough market experience, you might confuse yourself and end up making a emotional (and irrational) trading decision instead. And that is exactly what a mechanical system provides – it provides you with an edge over the market. When that happens, you will start to move from a fully mechanical trader to become a semi-mechanical and semi-discretionary trader. Since a mechanical system is a simple black and white approach, these emotions can be removed. Discretionary trading styles will not have the luxury of doing so because every trader is different and, hence, their discretion is a very personal thing.



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