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Try to find a trading method that will reflect your psychological bias towards trading. Not all traders have the patience to trade a computer system and watch the trades give back large amounts of open equity. Quite frankly, the heyday of $3,000 magical black box systems seems to have run its course. Very few mechanical trading systems are around and they are sold for the most part only to suckers who don’t know any better. The problem is that there are still plenty of those poor saps around.
Other traders want methods with as little involvement as possible due to job related responsibilities. Not all traders have the psychological traits suited to trade certain types of methods. Your broker cannot perform brain surgery on your behalf, when thoughts of a trailing stop are performing brain surgery on you.
Giving your broker discretion to trade your account as he/she sees fit, is like paying for someone else’s education. You will learn nothing from it other than how much money you have lost once your account is wiped out. Allowing anyone other than yourself to trade your account is the same as making an investment. If your broker was a good trader, he wouldn’t have become a broker. This is also true for using a mechanical trading system – you are making an investment. The investment is made in the ability of the person trading your account, or in the soundness of the logic behind the mechanical system.
Investing in a mechanical system or allowing your broker to trade your account at his/her own discretion is not different from investing in a commodity pool operator, a CTA, or a hedge fund. You are no longer in control of the trading. You have become an investor with whomever or whatever is in control of the trading. In that case, you had better be darn sure you know the real trading results of what it is you are investing in. Real trading results are a far cry from simulated results.
About the Author
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Joe Ross, trader, author, trading educator is one of the most eclectic traders in the business. His 48+ years include position trading of shares, and futures. He daytrades stock indices, currencies, and forex. He trades futures spreads and options on futures, and has written books about it all - 12 to be exact. Joe is the discoverer of The Law of Charts™, and is famous for the Ross hook™ and the Traders Trick Entry™.
His website: http://www.tradingeducators.com/ |
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