Discretionary scalpers or very active day traders may find that they trade well when they get into the market flow. However, recently I learned there are some negative sides to flow states. In particular, there is a risk that the trader ends up executing in auto-pilot mode without considering the account risk or why they are placing certain trades. This state is similar to flow except it in flow states the mind is sharper, awake, and considering super-normal amounts of information. Auto-pilot mode is very similar except the mind is not as aware: it is more similar to sleeping.
If you’ve ever thought after placing a trade or series of trades, “Why did I do that?”. There is a good chance you were in “auto-pilot” mode. You were probably not thinking or considering the risk or why you were entering the trades or you knew the trade was a mistake. And, I suspect that traders who trade in “flow states” and/or are highly discretionary are more at risk.
As for the solution, I suggest the following:
Curtis is passionate about markets. He has developed top ranked futures strategies. His core focus is (1) applying machine learning and developing systematic strategies, and (2) solving the toughest problems of discretionary trading by applying quantitative tools, machine learning, and performance discipline. You can contact him at firstname.lastname@example.org.
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