Experience vs System Development

[mishak]

In the recent POLL The Best way of Forex the 80% majority of voters split in two categories
Study by Yourself and get Experience
and
Develop your Own System

Are these two ways the same

Do you need real money experience (on forex) to develop a system or academic knowledge of TA (or whatever) are sufficient ?
Do you need a system to trade continuously on forex or just picking cherry opportunities (using your experience) when they happen is enough ?
What is a System - a set of trading+money management rules or some schedule/routine like "get up at 5am, enter the market at 7EST, close before noon" ?
Does experience means you've developped some individual trading style ?

Please contribute

The basic question is about Experience. When can you say that you have experience ?
Thanks

[Croesus]

Hi dear mishak!

Well...
I'm a bit confused indeed...
If we say "develope a system" the term "develope" encases all the process of solidification of the trading system, testing included! Now... if we do a lot of test and retouch and lot of test and other retouch an so on... isn't this experiencing?
I think that in order to develope a solid and profitable trading system experience is needed...

Studing only TA and then building up a trading system with what is learned don't is making experience? I don't think that the system can work immediately and however it can be surely improved!

Anyone out there have developed a trading system from nothing without experience?

[greedygriff]

from my own experience its important to study the TA and try to fathom out the best method of trading ie whether to use res/sup, bollinger bands, ema, Macd, Slowstoch, faststoch plus many other options, however my first demo account went from $100k to $200k in a matter of weeks, this is due to NO EMOTION.

TA and all of the other issues that effect the market each day cirtainly give us a clue as to what may occur, what they cannot do is keep you sitting still during the trading process, stop your palms from sweating etc etc, my live account has been hugely positive and now negative, its best to trade live and use a set of rules which you do not break, you will have loosers dont worry about them, think positve and get a mentor who will help with your system remember getting a system that works is equally important for your account balance as it is to keep your heart stress free and hair left on your head! good luck

[fairwind]

Hi folks,

http://www.moneytec.com/forums/_forumdisplay/_s-/showthread.php?s=&threadid=7657&pagenumber=1

In the link above I alluded to the idea that these two idea’s are inextricably linked to each other. One cant be done without the other.

“Experience” comes in two ways A) Demo trading, no stress B) Real trading, includes stress. In demo trades we try out a variety of systems and experience what works for us and what doesn’t. Hopefully, sooner or later, we can develop a system that will produce a profit.

“Develop your own system” requires study of the charts, the variety of idea’s we have tried out, the various combinations of indicators etc, etc. This is usually done by paper trading with a demo a/c. Hopefully we gain experience to develop a system that will produce a profit.


So, to develop a system we have to gain experience. Which come first? I believe they must march forward together.

Good trading to all……………..

[mishak]

Very interest point made by faure.
The title of his recent post is "Mechanical vs Discretionary (or trading the past vs trading the now)"
here is a part of it (the full post is on this thread )

I'm no big expert on systems trading but from what I've read in Joe DiNapoli's books is that mechanical systems will ALL bust eventually. It's up to you to use one while it's still working and stop using it as soon as it fails.
This is where you have to ask yourself whether or not this is how you would like to go about trading. If not then you have another option - discretionary trading.
Here's the kicker, subjective trading is a lot harder, more stressful (initially), and a longer process than what any system designing will ever be. BUT the rewards are much greater.