Trading -- systematic or discretionary ?? Part -1

Almost all of you who have persisted in markets for more than a year would have come across advertisements or endorsements of softwares promising overnite or consistent gains from stock markets.
Have you ever wondered what these 'magic' softwares are based upon ?
I have tried to enumerate a few underlying principles on which most of these systems are based ----
(compilation below is result of my web-surfing and I donot claim to be the first compiler of this list):

1. Moving average crossovers. Trading systems based on the crossover of two moving averages of different lengths is perhaps the most common systematic trading method. This method also includes triple moving average crossovers, as well as the moving average convergence divergence (MACD) indicator, which is the difference between two exponential moving averages. The moving averages themselves can be calculated in a variety of ways, such as simple, exponential, weighted, etc.
2. Channel breakouts. In this method, a price channel is defined by the highest high and lowest low over some past number of bars. A trade is signaled when the market breaks out above or below the channel. This is also known as a Donchian channel, which traditionally uses a look-back length of 20 days. The famed “turtle” system was purportedly based on channel breakouts.
3. Volatility breakouts. These are similar in some respects to channel breakouts except that instead of using the highest high and lowest low, the breakout is based on the so-called volatility. Volatility is typically represented by the average true range (ATR), which is essentially an average of the bars’ ranges, adjusted for opening gaps, over some past number of bars. The ATR is added to or subtracted from the current bar’s price to determine the breakout price.
4. Support/resistance. This method is based on the idea that if the market is below a resistance level, it will have difficulty crossing above that price, whereas if it’s above a support level, it will have difficulty falling below that price. It’s considered significant when the market breaks through a support or resistance level. Also, when the market breaks through a resistance level, that price becomes the new support level. Likewise, when the market drops through a support level, that price becomes the new resistance level. The support and resistance levels are typically based on recent, significant prices, such as recent highs and lows or reversal points.
5. Oscillators and cycles. Oscillators are technical indicators that move within a set range, such as zero to 100, and represent the extent to which the market is overbought or oversold. Typical oscillators include stochastics, Williams %R, Rate of Change (ROC), and the Relative Strength Indicator (RSI). Oscillators also reveal the cyclical nature of the markets. More direct methods of cycle analysis are also possible, such as calculating the dominant cycle length. The cycle length can be used as an input to other indicators or as part of a price prediction method.
6. Price patterns. A price pattern can be as simple as a higher closing price or as complicated as a head-and-shoulders pattern. Numerous books have been written on the use of price patterns in trading. The topic of Japanese candle sticks is essentially a way of categorizing different price patterns and linking them to market behavior.
7. Price envelopes. In this method, bands are constructed above and below the market such that the market normally stays within the bands. Bollinger bands, which calculate the width of the envelope from the standard deviation of price, are probably the most commonly used type of price envelope. Trading signals are typically generated when the market touches or passes through either the upper or lower band.
8. Time-of-day/day-of-week. Time-based trading methods, based either on the time of day or the day of week, are quite common. A well known trading system for the S&P 500 futures bought on the open on Mondays and exited on the close. It took advantage of a tendency the market had at that time to trade up on Mondays. Other systematic approaches restrict trades to certain times of day that tend to favor certain patterns, such as trends, reversals, or high liquidity.
9. Volume. Many systematic trading methods are based solely on prices (open, high, low and close). However, volume is one of the basic components of market data. As such, methods based on volume, while less common than price-based methods, are worthy of note. Oftentimes, traders use volume to confirm or validate a market move. Some of the most common systematic methods based on volume are the volume-based indicators, such as on-balance volume (OBV), the accumulation/distribution line, and the Chaiken oscillator.
10. Forecasting. Market forecasting uses mathematical methods to predict the price of the market at some time in the future. Forecasting is qualitatively different than the methods listed above, which are designed to identify tradable market tendencies or patterns. In contrast, a trading system based on forecasting might, for example, buy the market today if the forecast is for the market to be higher a week from today.

Why these softwares come up for sale ??

--- as  no one, sells the goose that lays golden eggs, probably the eggs, but never the goose.

In fact the other day I came across a revelation through Dr. Alexander Elder who has this to say about Gann:

They claim that Gann was one of the best traders who ever lived, that he left a $50 million estate, and so on. I interviewed W.D. Gann’s son, an analyst for a Boston bank. He told me that his famous father could not support his family by trading but earned his living by writing and selling instructional courses. When W.D. Gann died in the 1950s, his estate, including his house, was valued at slightly over $100,000. The “legend” of W.D. Gann, the giant of trading, is perpetuated by those who sell courses and other paraphernalia to gullible customers.

All of us , who have survived in the markets for three years or more, know it that the markets are a combination of repetitive patterns and randomness  and that is why it is not possible to find a Holy Grail.

And that is where the discretionary trader ,with his risk-management and position sizing skills, has to step in.

--- to be continued