I recently read Alaxander Elder's Come Into My Trading Room
To some degree, this is probably true. Many people end up trading a system that is not robust and which posses a risk characteristic that does not suit them personally. They probably end up having a bad experience as a system trader. He goes on to explain that a system is ok in a way, so long as it is always open to human intervention and discretion.A system trader develops a mechanical set of rules for entering and exiting the market. He backtests them and puts them on autopilot. At that point, an amateur and pro go in opposite directions. An amateur, fightened by the market, feels relieved that a system, either his own or bought from someone else, will free him from worry..."
From my perspective, this is exactly why proper mechanical methods work. Whats more, the mchanical method allows you to be removed from the mass psychology. With discretion I could filter out some trades that tuened out to be losers, but the reverse could also happen. The net outcome of my discretionary intervention would be a function of my consistent skill, trade after trade, month after month, drawdown after drawdown. On the other hand it could be a function of my luck at predicting the future....Automatic systems do not work because the market is not a mechanical or electronic entity that follows the laws of physics. It is a huge crowd of people acting in accordance with the imperfect laws of mass psychology.
I note more and more these days that a system trader is not fussed whether another person trades on a discretionary basis. But I am finding more discretionary traders who just can't keep their face calm when they hear someone trades on a systematic basis. There seems to be assymetrical negativity.
I really enjoy discretionary trading, however I prefer mechanical methods as they are independent of human weakness and error of judgement on a trade by trade basis over a very extended period of time and. A good system provides the clearest of road maps, and a good map will not get you lost.