TWO TYPES OF PROFIT MAKING TRADERS
Though there are countless trading styles to utilize, numerous markets to trade in, various time-frames to use, there are only two kinds of traders making money. The question is, which of which are you?
You can quickly identify which kind of trader you are as it boldly manifests in your trading statements. If you can’t seem to find where you belong, there is still room for correction and transformation. This will get easy once you’ve found your comfort ground, and when you’ve finally devoted yourself to the process right away.
These two types of traders are purely reliant on the methods they use when trading. To simplify, there are two ways to approach the market. The first kind is through the system and technology-based approach. This kind uses a mechanical system and algorithmic function to gain a consistent edge. The other one is more of a mental attitude wherein traders trust discernment and judgment to guess the next price movement. To state, it’s nothing out of the ordinary. It’s so common that the only challenge is how to be either of the two.
As for the mechanical or algorithmic side, I have witnessed traders purchase systems. These systems have been tested enough to guarantee traders consistent and exponential profits. If you happen to search for a great system, know that this won’t work exactly the way you want it. Now, this introduces us to our first kind of trader. This type of trader works with system and algorithmic functions. This means he or she is very much familiar and knowledgeable with programming, math, and statistics. A mechanical trader knows much about back-testing and the right intervention when statistical biases and algorithmic errors occur. Even traders who are not looking for a robust system often mistake that their back-testing does anything excellent and worthy. More often than not, it is diluted by countless statistical errors that project grave danger to trading accounts. This kind of back-testing dependent on mathematical and statistical function is complicated that only math prodigy will stand a chance.
What separates profitable mechanical traders from the rest is their deep understanding of the market. This is a prerequisite and an advantage since market conditions are uncertain and hard to determine. That’s why even though a mechanical trader gave you a powerful algorithmic system, you’ll consume too much time polishing and fine-tuning it to cope up with the market’s dynamic conditions. It is important to note that mechanical traders have various systems which they pick from according to time and market behavior. Indeed a taxing endeavor.
The second one is that which most traders are familiar with or in some sense, can relate to. They are called discretionary traders. They always make decisions to trade in the market. But what sets discretionary traders from mechanical traders? Put, they think, assess, rationalize and purchase according to the context.
Similar to how a mechanical trader works, they also have in-depth knowledge about the Forex market. They assess and take it to their terms what the next course of action would be. They disregard signals, indicators, and patterns entirely, unlike the majority of traders. Discretionary traders believe that these things do not mean when put into trading context. Instead, they use simple principles and approaches to project a mental assessment of the current market condition. Since they heavily rely on their rationale, they reject advice from trading advisors and gurus. These counsels don’t trade and often advised to focus on simple setups; thus, a refutable claim. A discretionary trader believes that simplicity lies in principles and practices. But putting them in congruence with the current market context is far from being simple. This practice consumes much time, training, and dedication.
While other traders derive their actions from patterns, setups, and indicators, a profitable discretionary trader depends on his skillset to read the market. They dedicate themselves time to build complex mental assessments of market context, and this is what makes them different from the rest.
CONTEXTUALIZING OUR APPROACH
If you happen to have subscribed to this site for a long time now, you’ll conclude that we are the second type of trader. Since we’re not fond of mathematics, programming, or high-tier statistics, we don’t engage in system back-testing. It occurred to us that only those that have adequate knowledge will succeed. And that unless we have strong math skills, it is more likely that we’ll inflict harm than benefit. Thus, we chose to be discretionary when it comes to decision making. This does not mean that we opt-out of following a structured or robust framework.
On the contrary, we have a set of structures to facilitate our trading decisions to keep it intact and organized. But we don’t go around telling people that it is easy and that success can be acquired if you learn the system. That would be an insult to the truth.
It can be learned, but the learning process is never easy. It demands time, dedication, and effort. We made it as our inspiration to produce a comprehensive training program to teach others what we know and what we do. There is a need not only to teach them about trading techniques but also on how to read the market. More so, to think and analyze in context. Only a few in this industry devote to such mainly because it is not accessible. It is easier to sell education products with a guarantee of effectiveness, but that’s not how trading works. That’s why we must tread the unpopular road and tell you that this whole venture is demanding and hard. But anything is possible if you pursue it. And if ever you want to be of the same caliber with profitable traders, you need to do everything it takes.
If you are willing to deal with losses just as much as willing to take risks, then you can be one of those mentioned above. And the payback is humbling once you tread this unpopular route.