One quality that I feel that can make for better discretionary trading is a good read of the market and a good ability to gauge trade quality through confidence, qualitative, and quantitative factors. I find tape reading and quantitative insights to be most useful.
But, it is just as important that when one has a high confidence trade to maintain strict risk discipline and detachment from outcome. As a trader, being very involved with the market improves performance provided it doesn’t spill over into poor decision making on risk.
What makes it tricky is that effectively to manage the risk you have to assume the worst case scenarios but to take the risk, in the first place, you have to believe that you are more likely to win.
The solution must be strict risk discipline. Trading more markets may also help if you have a problem with “risk ballooning” on your best trades.
The author 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 the author at firstname.lastname@example.org.
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