[Mindset] The reasoning that techniques alone do not guarantee victory
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This is Ryusei of FX!
A word I’ve been seeing a lot lately is,
“FX cannot be won with methods alone.”
There is.
I understand that logic,
but I’m not convinced (laughs).
Because I win with just methods.
However,
going against my own values and completely denying other approaches won’t get us anywhere.
With the premise that you can’t win with methods alone,
discretionary trading exists,
and there’s a fascinating world that opens up there as well.
It’s true.
Let me explain in detail ^^
The logic of “You can’t win with methods alone”
In FX trading,
there are truly many
“methods”
that exist.
Most of these are classified as technical analysis,
indicator analysis, price action trading,
and various other discretionary trading methods,that share almost a common core at their foundation.
That is the basic concept of
“You can’t win with methods alone.”
Therefore.
Most trading methods have
basic rules of technical analysis.
You draw lines to analyze support and resistance,
refer to indicators,
and there exist
the “basic trading rules.”
Those rules are what constitutethe trading method, but
can that method berepeated mechanically to win
? The answer is no.That’s the reality.
Even if you mechanically repeat the prescribed rules,
there’s little profit left,
and that’s the reality.
This is exactly the
“You can’t win with methods alone”
logic.
Even in technical-method products,
some claim “You can’t win with methods alone.”
and that’s true,
For me,
“Then just use moving averages and you’re good.”
I sometimes think that way (^^;)
■ You can’t win without not having discretionary elements
So what should you do to win?
The answer is obvious,
as you can imagine.
“The discretionary element.”
Yes (smiles).
Learning the method is very easy.
However,
it’s hard because you can’t reproduce the discretionary element.
The core of discretionary trading lies in the accumulated intuition of individual traders,
and it’s truly a craftsman’s world.
A few traders who have mastered the craft use their
sensein trading.
Conveying that sensory part accurately is
really difficult
I think.
The basic methods are easy to explain.
But with only those basic methods, results are
not useful, which is a problem (laugh).
■ Ryusei’s use of discretionary and non-discretionary trading
Complete non-discretionary trading means
trading strictly according to mechanical rules.
There aren’t many technical methods that can profit under that constraint.
“Is the concept of ‘you can win without discretion’ just a phantom now?”
Discretionary trading is so tough that it seems so, but
I was able to break that norm with my BBP.
For methods that can win without discretion,
the logic is incredibly simple.
The rules are so simple that it’s almost embarrassing to tell the students,
and of course teaching it is extremely easy, and
the trainees just follow the rules, so the reproducibility is extremely high.
Thus, we possess a very rare FX scheme,
but personally,
I also practice the know-how of “incorporating discretionary elements to stabilize”
as an intention.
That is exactly what I deliver to tool purchasers as
“Discretionary Decision-Signals Delivery.”
It’s that thing.
There I apply my own sense of discretion
and achieve a certain result,
but if I were to teach the mechanism of that
“sense”
in a consulting session,
the reproducibility would drop dramatically.
Because outputting the discretionary sense in a 100% clear form
is impossible.
So in my consulting,
the discretionary element is treated as
a “sub”
part.
■ In trading schools that focus on discretion, there are many complaints
A trading school, especially a one-on-one tutoring type, tends to be expensive.
I understand that fully.
Because you can get direct instruction from someone who has the know-how,
it’s natural that it’s costly.
However,
the content being taught is essentially
“Discretionary trading.”
So, inevitable lower reproducibility occurs.
You’ll hear stories of deceiving signals,
students enter based on rules and suffer losses,
while the teacher ignores those signals.
Eliminating deceptive signals and somehow picking signals that profit,
the teacher does it, but
students cannot reproduce it.
That is a common issue
in trading schools.
When dissatisfied,
people complain.
There are stories of former students who taught trading but quit after bad experiences (^^;)
That history is easy to imagine.
■ That said, discretionary trading offers high learning value
And,
I’m not criticizing discretionary trading itself.
It’s true thatthe knowledge is less reproducible,
which makes learning valuable.
Discretionary elements can bend the fundamental principles of FX trading.
So top discretionary traders sometimes stand out.
Well,
many successful discretionary traders are geniuses,
and that means they’re often poor at teaching.
There are many cases where students feel they don’t receive efficient learning from such services.
■ Not all hyper-returning discretionary traders are the norm
However,
when you look closer, there are many discretionary traders who earn 20–30% annually with stable results.
Such prudent stances are plentiful.
I prefer those approaches,
since they’re likely to survive in the long run.
Also, not every winner with discretionary trading has no drawdowns or endless money-making talent.
That is a big mistake.
In the end, a prudent path tends to have the longest staying power.
Judgments based on one year or two of performance aren’t enough to assess a trader’s merit.
Some traders achieve huge short-term returns but fail to anticipate potential drawdowns.
That can lead to ruin the following year.
As for BBP’s forward test this year,
the yield is over 35% with drawdown under 2% (laugh).
the maximum drawdown remains within 20%.
Even so, we don’t do such reckless things.
We know the potential of the method very well.
Many traders are confident with the claim
that they can handle it without issues,
and they push the limits with reasonable lot sizes.
People often decide lot sizes based on their emotional scale,
but for me,
that is unimaginable.
That’s the approach (^^;).
Suchemotionalcapital management is something I can’t bear.
Capital management must be
logical.
■Summary
Recently I’ve been meeting highly discretionary traders and re-recognizing discretionary trading.
Personally, I used to think discretionary traders were often
“data-poor people.”
But when I face them closely,
they’re outside the normalcy of system trading in a good way.
In system trading, you inevitably watch probabilistic convergence,
but discretionary trading has an ennui of pulling out a card,
which in a way makes probability convergence more complex and distorts the principles in a good way.
It’s very interesting.Going forward, I’d like to become friends with more discretionary traders (laugh).
