Trading Beyond Rules and Constraints

Perception and Adaptability

“Take the shackles off my feet so I can dance…”

Remember that track from 2000? No? Just me…

Anyway, trading is a lot like that song. You can’t dance with the market whilst your arms and legs are shackled. What does that mean?

If too many rules constrain you, you can’t flow with the rhythm of the market. I don’t consider myself a dancer, but I’m pretty sure if you gave a pro dancer a set of rules to abide by and chastised them for any deviation during a routine, they would dance dreadfully!

Just like trading.

If you are a discretionary trader, you need the flexibility to adjust and adapt. Too many rules and you take away the human edge. I’m a big believer in setting important boundaries like financial risk rules and the maximum number of trades in a day. Sensible constraints like that.

Even some structured setup guides

  • Long at support after a drive
  • No continuation trades if the range exceeds the daily ATR
  • Add to a flag on a break

Tactically sound recommendations. But after that, give yourself room to play the game!

Today, think about how you can nurture the art of trading, and let the unquantifiable edge flourish.

How can you trade safely yet give yourself the flexibility to adjust and adapt to what’s in front of you right now? Because unless you’re building a mechanical system you may as well leverage on the best part of being a human. Perception and adaptability.

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Flexible Guidelines

This is a great article on self-imposed rules and how to tweak them to accomplish what you want.

Especially this one “Use flexible guidelines”

See, I knew there was some science behind my thinking!

Until next time.