There are some people who use discretionary stock trading systems.
But what is the potential flaw in discretionary systems that you must accept?
With discretionary stock and CFD trading systems, you can make trading decisions on the fly (not just follow a 90-100% mechanical system) and may be required to apply judgement to a situation. the price action, or indicator action that you see right in front of you.
But there’s something to consider.
You may not enjoy the process of “thinking” or in real time, “applying” your knowledge.
Heh, this is not meant to be funny, but to many people, “thinking” when it comes to trading presents a few problems.
And these are:
1. Stress (making trading decisions can be stressful when real money is at stake, and may make trading a stressful activity – a popular preconception, but it’s not meant to be!)
2. The possibility that your experience may not be strong enough yet to enable you to make your trading really profitable (as it is for the very experienced traders with 1 or 2 years of trading that CFD system, and who possibly may not have been profitable at the beginning)
3. The lack of a backtestable result may mean that you have little idea of how the trading system will perform. Granted there is no such thing as 100% certainly even with a backtested system (we’ll go on to talk about backtested systems later), but the inherent difficulty in following a guru’s footsteps is just that. You’ll need enough “access” to the guru to learn enough.