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Category: Articles » Finance » Currency Trading » Article » Article Code

Product Information: The Mechanical Discretion Program

Many people starting out in FOREX trading quickly reach the opinion that most mechanical trading systems just don't live up to their claims. On the other hand, using a full discretionary trading system can be overwhelming...even for some experienced traders. There IS a trading method that has combined the best of both worlds and allows the trader to find an intermediate trading system of his or her own. Let's start with one basic supposition: Mechanical trading systems simply do not work! Okay, now that we have hurt some feelings, let's go back and clarify a little. If we ... read more

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Let's start with one basic supposition: Mechanical trading systems simply do not work!

Okay, now that we have hurt some feelings, let's go back and clarify a little. If we look at the performance data on mechanical trading systems taken over time, they do not consistently show a good enough performance for a small to medium trader to consistantly trade effectively and economically. While you can certainly find "periods" of excellent profits and performance there are losses and expenses also found which would tear small traders to pieces. Another point is that while these systems may have long periods of apparent success, they also seem to have long periods of failure as well.

A key point here is that were you to begin using a purely mechanical system at the wrong time, you could be facing an extended period of losses before things turned around and began to show profit. Few small traders have the financial depth or internal fortitude to bear with such an extended period of losses before reaching a successful turn around.

However, you, and others, may make the point that everywhere you turn it seems that others are using mechanical trading systems successfully. While this is apparently the fact, many of these apparent successes are occuring in an uptick period, and careful observation of past activity will show previous periods where the same traders would have lost as much or more as they are making now. Also, many of these "successful" traders are using a secret weapon to modify the guidance of their mechanical systems.

What is happening in many of these cases is that the successful traders are using their own discretion to modify what the mechanical system appears to be telling them. They have many tools at their disposal including a multitude of indicators, charts, Fibonacci techniques and other technical analysis methods. Additionally some have enough experience to successfully integrate intuition, feel, and instinct into their final judgements.

Even when they experience periods of poor performance, adding the capabilities of their own brains to the results predicted by mechanical trading systems gives them a means of improving overall performance of their trading activities. Just like the mechanical trading system, they will have periods of poor performance, but the combination of a mechanical system with the power of intelligent discretion has given rise to a new type trading system. It is called Mechanical Discretion.

Mechanical discretion is relatively simple. As implied above, it is merely a structured way to bring human brain power and mechanical trading systems together to create a more flexible and more effectively reactive system of gathering and processing data for trading. A trader using Mechanical Discretion takes the results of a mechanical trading system and adds to it many of the types of analysis and indicators mentioned above.

A bad thing about Mechanical Discretion is that it requires a certain knowledge and ability for a person to be able to form and superimpose his or her personal analysis onto a mechanical trading projection in order to mold it into a final, effective form. On the other hand, a good thing about Mechanical Discretion is that, while some people have the education, background, experience, or natural feel for it, even relative beginners and those with limited experience or skill can learn the processes and techniques. In fact, the Mechanical Discretion program is intended to teach itself to the user.

Even so, Mechanical Discretion is not recommended for the beginning trader. It will be a much more formidable tool in the hands of someone with at least some trading experience and innate understanding. My wife likes to use this system and assures me that it is probably of more value to the experienced trader than the rank beginner or someone only slightly experienced.

It is important also for the beginner to learn the basics of trading, money and risk management, order placement and trading psychology before sinking money into another system that may be beyond their capabilities no matter how effective it is potentially.

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