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flexibility is a key trait for successful traders (when proven wrong to limit loss, re-enter when a past losing trade sets up again, etc.) as it helps avoid confrontation with the market
flexibility comes from detachment which is not easy as traders develop unconscious biases
flexibility comes from detachment which is not easy as traders develop unconscious biases
biases come in many forms i.e. specific stock, market, method, etc. Have seen experienced traders on my feed fall prey to this and fight the market (predicting what will happen vs accepting what& #39;s happening)
however, even if one is aware of one& #39;s biases, it& #39;s not easy to reverse course esp. in real-time. Emotions are involved and there& #39;s always a pressing need to be & #39;right& #39; across stock/market/method etc.
Potentially many solutions but to me simpler one involves BUILDING flexibility in one& #39;s method and THEN sticking to the method. In the heat of the moment, it& #39;s difficult to practice flexibility but following a method is easier.
Refine the method as feedback is accumulated from the market to plug holes, if any. Remember there& #39;s no perfect method and one has to accept living with losses. But losses better be because of random nature of market (good) rather than fighting the market (bad)
corollary = flexibility should be demonstrated at multiple-levels. Stop loss is a form of flexibility (flexibility in active trade) but it still won& #39;t save from a drawdown by 1000 cuts if you keep forcing growth names even though market disagrees (flexibility in method)
in the latter case it& #39;s OK to sit out (once you recognize and accept growth isn& #39;t in flavor) but even better to play cyclicals when they are the ones working. Esp. if you& #39;re a price based trader. Flexibility?
Hard to not notice that simpler the system, more flexible it is due to less variables involved. By all means, have rules but not too many and only basis 1st principles (not on the current flavor of the day/week/month/quarter/year/decade/...) so that they work more often than not
related point by @RayTL_ to reinforce right behavior i.e. track your allegiance to your system (w/ flexibility built-in) vs outcomes https://twitter.com/RayTL_/status/1380563905265631237">https://twitter.com/RayTL_/st...
mindset pivot is important
another important pointer https://twitter.com/CapInfiniti/status/1380746026391248902">https://twitter.com/CapInfini...
another important pointer https://twitter.com/CapInfiniti/status/1380746026391248902">https://twitter.com/CapInfini...
Soros and Druckenmiller are known for their flexibility here& #39;s @PeterLBrandt emphasizing flexibility
not surprised most misunderstand it
not surprised most misunderstand it
https://twitter.com/PeterLBrandt/status/1380717521217544196">https://twitter.com/PeterLBra...
true trend following is an example of a system which solves for this through it& #39;s in-built feature i.e. not fighting the market
Recent (US equity market, Q1) example on how inflexibility hurts returns by Brian https://twitter.com/bclund/status/1380837969259593731?s=19">https://twitter.com/bclund/st...
Overtrading (esp shorter time frames) and over-sizing compound the problem
Brian elucidates this well. Need to survive bfr (& after!) one develops awareness to become flexible. Ability to say no to getting rich quick (playing long game) is a superpower esp for a beginner https://twitter.com/BrianLeeTrades/status/1380623549224738816?s=19">https://twitter.com/BrianLeeT...
