Is discretionary e-mini day trading right for you?
There are two distinct styles to trade e-mini futures. One is purely mechanical, the other is purely discretionary. It's possible to use a hybrid approach, but in reality, this is often not that advisable as you simply end up with what is just more complex mechanical e-mini trading. Some people prefer a mechanical style, others feel better with the discretionary approach to e-mini trading. Both are fine, but one is clearly better than the other, especially for retail traders. It is the discretionary trading style.
Yes, the discretionary trading style is definitely better than the other one, yet many people, most perhaps, tend to go after mechanical trading. Which is a very good confirmation of what I just said, namely that discretionary trading is better. How so? Well, simply because the majority of people tend to be wrong.
It is easy to understand though why so many people prefer mechanical trading. For once, it is so much easier to master it. It may take just a few days even in the case of the most complex mechanical emini trading systems out there. Plus, some of the mechanical systems can easily be automated and so you can get your computer do all the work for you, while you simply collect the profits.
It is this allure of simplicity, limited effort, and relatively easy implementation that makes mechanical trading so widely followed. But unfortunately, this also means that many people never master the art of trading, but merely the art of operating trading systems. Their trading careers start and end at reading system manuals, which is certainly not enough to become a consummate trader.
To master the art of trading at its finest, you need to learn how to read the market well. That's the basis of discretionary trading. Once you have done so, and this may take months if not years, although a good mentor or a trading course can shorten your learning curve to only a few weeks, you will never consider mechanical trading a serious option. The reasons for this are quite simple.
Mechanical trading systems, and emini trading systems in particular, tend to go through relatively deep drawdowns and flat periods during which the system loses money or makes no new profits. "Relatively" here means compared to the discretionary approach where this problem is not as severe because of the discretionary trading style much greater efficiency. To ensure steady profits that could amount to a decent living when you rely on mechanical trading systems, you often need to trade more than one system and diversify across a few markets. Plus, you also need a bigger size when trading in a discretionary way.
For many small retail traders, the purely mechanical approach is out of the question if they want to make a steady living. They can however do quite well, trading in a discretionary fashion, trading with just a few contracts and only one market.
Is discretionary trading approach right for everyone? Yes, definitely so, although some people may at first be less likely to succeed with it than others. The more flexible you are and the better your market reading skills are, the more likely you are to enjoy a good start. Sometimes a very good start.
But I believe that everyone can master the art of discretionary trading. The main reason why some people may be convinced this is not the right thing for them has to do with the fact they have not spent enough time to master this approach being lured by the much easier mechanical trading style. If you are not willing to spend enough time on something more challenging, yet also much more rewarding, you are not likely to appreciate it.
Dedicate more time to it and you may as well see that this is indeed the totally right thing for you. Don't dismiss it too soon and don't fall into the trap of thinking that you are not predisposed to discretionary trading. There so no such thing as being predisposed to a given occupation. No one is born a fireman, a pilot, or a teacher. You simply get trained to become one, just like you get trained to become a discretionary trader.
And, what's more, you can even train yourself. For instance, using KING.