Why I Take Discretionary Trades
As A Quant
Systematic traders thrive on structure—rules, backtests, and crystal-clear strategies. But in today’s post, I share why I still occasionally venture into “hands-on” discretionary trades. The reason isn’t just to hunt for quick gains or to feed the thrill of trading. It’s a deliberate approach to experimenting: dabbling in new market sectors, watching how price reacts, and sparking fresh ideas I might later fold into a fully tested strategy.
Take the natural gas (UNG) example. Its extended drop below the 200-day moving average and subsequent “regime change” break helped me recognize a potential new pattern for a system. Had I stuck solely to my existing algorithms, I might have missed that live data point that told me: “Hey, there's an interesting edge here—let's code it up and see what the backtest says!”
It’s crucial to remember that systematic rules keep your portfolio on steady footing. Discretionary trades can be small “seedbeds” for new discoveries. Observe, experiment, then backtest to confirm. It’s exactly how I keep my strategies evolving—staying systematic while allowing creativity to flourish. Go on, add a little play to your trading routine, and see if you don’t uncover something that strengthens your core approach!
Discretionary traders need strong emotions and self control. The destructive behavior can come out very quickly. Systematic Trading is more long term and easy on the mind and routine. But discretionary can be a small portion of your traded to keep the creativity alive like u said. Thanks for sharing.