After talking to many manual traders during the past few months I have come to realize that those of them who succeeded quickly had something very simple in common : a successful mentor. When you are using discretionary trading the only way in which you can “cut the road” and gain an idea about the mathematical expectancy of the discretionary method and its intended profit and draw down targets is if someone who has already gone through the whole experience guides you through the process. New traders are taken under the wing of a successful manual trader have the advantage of counting with his/her experience which counts as a “trading record” that already shows evidence of what works and what doesn’t and what has seemingly shown a mathematical edge in the past.
Manual traders who are not this fortunate seem to go through a very painful road that seems to have two main options. Either the trader becomes completely mechanical and decides to use systems which can be defined and simulated in computers to get the draw down and profit targets needed for success or the traders decides to take the discretionary road in which these targets will only become apparent after long periods of time (what seems to be an average of 5 years).
It is however good to say here that this doesn’t make automated trading or even the trading of mechanical systems in a manual way any easier than discretionary trading. Even though both roads eventually seem to lead to the realization of a positive edge and long term profitability in the market the truth is that both of them require huge amounts of work and a lot of effort. They both have similar psychological traps and both make the journey as hard. As a matter of fact achieving a certain level of average profitability in the long term with an algorithmic trading system is just as hard as doing it with discretionary trading although both roads are difficult in different ways. In both method people will fail incredibly in the beginning and success will only come when a deep understanding appears.
In both ways of trading your chief opponent is yourself and your ability to tackle the psychological issues related to trading will be vital. However it seems that when people are venturing into the world of forex trading through a discretionary path having a mentor seems to play a huge difference. Interestingly enough -from the number of discretionary traders I know- about 1 in every 20 has been profitable for at least 5 years and all of them had a mentor who taught them how to be profitable in trading. It is easy to note that this “passing of knowledge” makes new traders “take a leap” and gain many advantages that other traders who may attempt to become successful without a mentor do not have.
So my advice here is also pretty simple. If you want to become a successful manual discretionary forex trader, find someone who has already done this and get an education from him or her, it will save you a lot of money and it will give you an edge the bast majority of new traders do not have. If would rather become a mechanical trader using sound systems you completely understand with clear draw down and profit targets please consider joining Asirikuy.com, a website filled with educational videos, trading systems, development and a sound, honest and transparent approach to trading systems. I hope you enjoyed this article ! :o)