"When a man asks himself what is meant by action he proves that he isn't a man of action. Action is a lack of balance. In order to act you must be somewhat insane. A reasonably sensible man is satisfied with thinking."
James A. Baldwin
According to Mr Baldwin, we all need to be somewhat insane at the moment we place that order. hmmm
The market is seldom in a state a balance; therefore, I submit, by reason of insanity, we not be held responsible for our losses. Well, think about how many times you've read posts where the writer is pleading such a case! Now that's insanity!
OK, I'm sorry if that sounds a bit crazy, but recently I was reminded of something a former IT manager/boss of mine said many times. He had a Masters in Literature and understood the difference between the generally accepted terms of logic and reasonableness. He argued that just because the scripts we wrote were logical we also needed to determine the reasonableness of the data that was generated by the scripts. Apply that argument to trading and voila!
The legal argument for insanity does have merit in trading as well, just not after the fact. You must be in a balanced state in order to percieve the market imbalance that you wish to exploit. Not the other way around. Is your trading plan/system reasonable? Is is reasonable to expect price to trend strongly when there's no major financial data releases next week? Is it reasonable to expect your recent period of great trading to continue if you continue the exact same method every week.
Most importantly, is the market acting in a logical manner. If your answer is no, then why apply logic to an illogical beast? Is that being reasonable?
You see, reason must be your constant companion and if something doesn't stand to reason it may be time to jump ship until you have good reason to get back on. All the indicators, trading books and mentors in the world will do you no good unless they can withstand the reasonableness test. What's good advice today may be bad advise tomorrow. The final decision is yours. Don't give that power to someone or something else.
Just food for thought...
Have a nice weekend!
James A. Baldwin
According to Mr Baldwin, we all need to be somewhat insane at the moment we place that order. hmmm
The market is seldom in a state a balance; therefore, I submit, by reason of insanity, we not be held responsible for our losses. Well, think about how many times you've read posts where the writer is pleading such a case! Now that's insanity!
OK, I'm sorry if that sounds a bit crazy, but recently I was reminded of something a former IT manager/boss of mine said many times. He had a Masters in Literature and understood the difference between the generally accepted terms of logic and reasonableness. He argued that just because the scripts we wrote were logical we also needed to determine the reasonableness of the data that was generated by the scripts. Apply that argument to trading and voila!
The legal argument for insanity does have merit in trading as well, just not after the fact. You must be in a balanced state in order to percieve the market imbalance that you wish to exploit. Not the other way around. Is your trading plan/system reasonable? Is is reasonable to expect price to trend strongly when there's no major financial data releases next week? Is it reasonable to expect your recent period of great trading to continue if you continue the exact same method every week.
Most importantly, is the market acting in a logical manner. If your answer is no, then why apply logic to an illogical beast? Is that being reasonable?
You see, reason must be your constant companion and if something doesn't stand to reason it may be time to jump ship until you have good reason to get back on. All the indicators, trading books and mentors in the world will do you no good unless they can withstand the reasonableness test. What's good advice today may be bad advise tomorrow. The final decision is yours. Don't give that power to someone or something else.
Just food for thought...
Have a nice weekend!