A discretionary trader, you will realize that most of the time our strategy, our edge … right? … is based on something that is against human nature. Alright? For example, when we look at support resistant reversal phenomenon, for example, that is a phenomenon based on human nature. So, when we look at that phenomenon and we try to trade on that phenomenon, we’re actually trading against the bulk of the population out there who doesn’t see this phenomenon. Alright?

So, which means that as long as the bulk of the population out there doesn’t see this phenomenon, then this edge will always remain there. Alright? So, that’s why I will say that as a discretionary trader, the price action trading, the kind of tools that we use, it worked a hundred years back, a hundred years later, I think it’s still working.
And I think the only time that those methodology for discretionary trader or price action trader wouldn’t work anymore is when human nature change. Okay?

So, I’m not so sure whether human nature will actually change in my lifetime. So, that’s the reason why I, when I look at charts based on the current kind of time zone or current period versus like 20 years back, 30 years back, you still see very similar things that are still happening. All those key levels flipping around and those trends when it breaks and things just start breaking down. So, it just keeps on happening.
So, for discretionary trader, I’m not so worried about back testing, but I’m more concerned about, “Is the methodology sound?” And after I start applying it, I just keep tracking and see whether my net R-Multiples and my expectancy continue to remain at a positive level or even improve thereafter.

Interested to receive mentorship opportunities like this with Philip?

Find out more at traderwave.com/innercircle

Philip Teo

Founder & CEO at Traderwave Pte Ltd
Philip Teo is an entrepreneur, speaker and trading coach who specialises in the field of Technical Analysis of the financial markets. He is currently the Founder and CEO of Traderwave Pte Ltd, a financial technology company that offers a web charting application to global traders. He has conducted many trading seminars and appeared on national television before. He is also currently an official speaker and trainer with SGX Academy. Learn more about him at his Google+ Profile, LinkedIn Profile and Facebook Profile

Ready to Trade Profitably?

Get our latest updates and trading ideas in your inbox