This post is not a recommendation to trade or to trade any particular system.
This is the question posed by Hamlet, and by CFD traders alike!
Is it better to trade a mechanical or discretionary system? Is one more profitable than the other? And how does it relate to the personality of the actual trader themselves?
Well, this post discusses the features of trading mechanical and part discretionary systems.
1. Mechanical CFD trading systems
These systems can be programmed into software.
What this means is that your trading rules are 100% mechanical, and relies on no discretion (except when more trades are triggered than you can enter – though this can be overcome with a rule to decide which share or stock CFDs to get into).
This also means that you can get accurate (though not perfect) mechanically tested results. And this is backtesting which means the historical performance. If this CFD system performs well in the past, however future performance is not guaranteed.
2. Discretionary CFD systems
These systems rely on interpretation of price action and patterns and other indicators that are not 100% mechanical. For example, if a system relies on trend lines or chart patterns that cannot be plotted by your favorite trading program, then this does rely on your discretion to some extent.
In fact, in either mechanical or discretionary, the ultimate test is forward testing or trading or course.