Of course you have – it is a ridiculous question.
What does this have to do with Trading…EVERYTHING!
A little while ago I was updating my trading data and checking my account and I realized that my account had been down for a couple of days in a row.
Now it was nothing major, just a couple of % and certainly well within what I would consider normal. It was just an observation at that point and nothing more.
Then I noticed that some of the international markets had been down overnight and there were a couple of reasonable sized moves against the primary trends. Again, nothing that out of the ordinary…Just another observation
Then I saw a few headlines and blog comments that were negative about certain parts of the economy. Again nothing abnormal. You can find these every day of the week, so this was hardly unusual.
My trading data was all up to date by this time so I ran my systems and found that I had to enter a few new trades. This was also totally normal because I scan over 10,000 instruments for trading signals every single day, so there are often trading signals to take!
It was at that moment that I paused to reflect on my emotions…
…I realised that somewhere inside I was
fearful of these new trades…
I had just seen 3 things that suggested weakness in the market, but here was my trading system telling me to buy.
If I was making my trading decisions using judgement then these buy signals may have been hard to take because of the fear that seemed to come up for me because of what I had observed that morning.
BUT HERE IS THE THING…
- My trading systems don’t have emotions, but I do
- My trading systems have been backtested, but my emotions haven’t
- My trading systems have been tested on 100 years of data, but I am not that old
- My systems are stable across a range of conditions, but my emotions aren’t
- My systems ignore irrelevant data, but my emotions don’t
So overall I would say I my trading systems have a far better track record and chance of success than my emotions do. So of course I took the trades because I am a mechanical system trader.
Guess what happened?
That’s right, the trades were profitable!
I have been profitable for many years and perform far better than the broader markets that I trade in both absolute return and volatility. But I achieve this because of my trading systems, not because of my emotions!
If I let my emotions influence my trading decisions my chances of achieving this performance would be……ZERO!
So since we are all human, and since we all have emotions, and since our brains all work the same way, I believe trading systems are probably worth considering for most people who are keen to make money in the markets.
Many years ago my trading became dramatically more profitable and consistent when I moved from discretionary to systematic trading. I am sure more people would make money consistently (though of course there is no guarantees) if they used trading systems rather than trying to outsmart the markets based on gut feel, intuition or discretion (all of which are subject to emotional impacts).
Trading Systems may not be right for everyone, but my guess is that most people would do better with a system than without!
Most people would probably do a lot better in the financial markets if they used a Trading System
If you have had some trading experience but are not getting the consistent returns you really need, download my trading system development cheat sheet now and see how simple a great trading system can be.
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