What is DISCRETIONARY black box trading?

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It possibly means algo based proprietary trading (using broker’s own funds). The trades originate from an algorithm… aka black box.

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This is another possibility

“Discretionary trading” means manual trading based on subjective judgements.

“Black Box” means completely automated systematic trading where internal functions/logic/calculations are completely hidden from the end user.

A combination of both could mean discretionary black box trading where one uses readily available black box system to generate signals but then decides whether to take those trades or not.

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Good answer Ajay. It gave a good understanding :slight_smile:

Ajay, i have heard that all black box traders will sooner or later bust their account. What is ur thought on using Discretionary black box trading? i am considering to take only long signal on 15 minutes if daily time frame is in uptrend and vice versa for short. Ur thoughts pls… thanks.
Karuna

"i have heard that all black box traders will sooner or later bust their account.'
This could apply to many other traders and not only to black box traders. Some common reasons are
-with each loss trying to tweak the system to get rid of loss.
-giving up on well tested system after a series of losses.
-not following the system religiously and every now and then breaking the rules and taking impulsive decisions.
-especially for black box system, results and performance may not be as good as it is claimed to be. Hindsight is always 20/20 and it is not difficult to generate a seemingly good system by trying enough permutation and combinations of various params/indicators especially with the latest computer technology.

"What is ur thought on using Discretionary black box trading"
Systematic mechanical trading is always recommended to get rid of emotional impulsive decisions. I don’t have much experience with black boxes except for theoretical knowledge. Personally I would still not use a black box for the simple fact that every thing is hidden and there is no way to crosscheck/verify results or past performance. Instead I would recommend developing your own system, its not that difficult and worth the effort. If at all go for White Boxes where you have knowledge of indicators/params/functions/calculations. You also get flexibility to back test and verifying the results for yourself before using it for real time trading.
Found a good article about black box system
http://adamjowett.com/2011/12/black-box-trading-systems-10-things-i-learnt-programming-them/

" i am considering to take only long signal on 15 minutes if daily time frame is in uptrend and vice versa for short."
That is a very good idea. Taking signals on shorter time frame in the direction of larger time frame trend is one of the best strategies. That is what trading with the trend is. In fact while developing/back testing you can run one test with this scenario and see the difference in the results.
Some final thoughts
There is no harm in trying and doing anything as long as we know what we are doing. On a cautionary note, once you have decided to use discretion only to eliminate short trades in uptrend and longs in down trend, then use if for that filter only. Do not try to second guess longs in uptrend and shorts in downtrend. In short, once you have a well tested system, write down the exact rules of how you are going to trade (discretionary decisions included), if possible test these as well and then stick to them.
Wish you all the very best.

thanks Ajay, ur comments give a fresh perspective :slight_smile: will test it and let u know how it goes.