You don’t need to follow trading rules

We’ve all heard the proselytizers of trade planning bemoan lesser traders that they need to follow their trade rules. Yet, emotional traders still dominate the retail trading landscape. After hearing about how bad they are for acting as they do, they flagellate themselves for allowing emotion to enter into their trading decisions and re-dedicate themselves to discipline trading without emotions. But who are we to judge why and how someone else trades with their money?

Of all the different types of trading styles, I find the emotional style of trading the most entertaining. It is more human and natural than a game of probability. There is personal stuff at stake. Anyone who preaches to you that you need to stop it and get a plan is really preaching to themselves. They are healing a wound, or trying to convince themselves that they no longer participate in the egregious activity of trading without one. They are essentially scared of their emotions.

You cannot detach yourself from your emotions. If you want to trade based on emotions, I support your decision. After all, it’s your money and it’s not my place to tell you what to do with it.

Rules. We think of them as ‘made to be broken’ for a good reason. Rules are limiting and suffocating. Yes, we need some basic ones in our lives, but as soon as a method of trading is defined as a rule, the inner workings of the imagination begins the task of find ways around it. It’s only natural. Our total human experience cannot be contained with stupid rules. And who is making these rules anyway? Why are they valid? We all know that rules are put in place because we basically don’t trust someone (maybe ourselves) to do the right thing when the time comes.

Rules are really a false sense of security. Your contrary imagination will find a way around them, as water finds its way around rocks. It takes more than rules to prevent yourself from being stupid.

You don’t stick your hand in a fire because you’re following a rule that one should never stick their hand in a direct flame, but rather you’re resisting the urge because you have some common sense and an underlying urge towards self-preservation.

Become comfortable with yourself. And if you are recovering from the horror of losing large sums of money due to your own compulsive behavior, please don’t preach to the rest of us about how much we need to follow rules.

If you should decide to employ trading rules, have it be because you choose to make your trading simpler, not because someone told you that you need them.

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One Response to “You don’t need to follow trading rules”

  1. tradersams Says:

    You are right – there is personal stuff at stake. And noticing the preach-i-ness of many writers is something I have seen so often I almost 'don't see it'.

    I find I bounce between discretionary and system trading – and over time I am almost wondering how I can guage myself to know when I flip between the two methods. This might mean more rules, but the goal is to find what works – and does seem to fly in the face of many of the popular writers. And as you say – rules are false security.

    Good post

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