Teaching is hard. I look back on what I did to my parents, my teachers, and coaches, they had some serious patience. They must have used a bunch of energy trying to get their points across. And of course my personality and lack of experience got in the way.
One of the hardest things for them to explain to me is the difference between fair and equal. Why did my sister get to stay up later? She was older. Why did my teacher grade me harder than others? Because she thought I could do much better. Why was I punished differently when I made a mistake on the football field? Because I could handle the criticism.
Adapting to the situation.
The more time we spend with an individual we understand how to best achieve what both parties want. Approaching all people in the same way is usually not as efficient, especially after awhile. If something seems unfair it is because the third party does not have all of the information.
Filled with contradiction.
Trading advice is filled with contradiction for the same reason there is a difference between fair and equal. Fair applies context and equal does not. It is the difference between using a hatchet and scalpel. The difference between limits and limitations. Limits lock you in a box and prevent growth while limitations promote it. Fair is a limitation and equal is a limit.
Evolution of limits
Most traders come in without any limits and to stop losing they create them. Normal, natural, expected. But the best learn the difference between limits and limitations very quickly. A limit says I will not trade Friday afternoons. A limitations says know when to stop. A limit is based on a bad result in the past and only reviewed once. A limitation is based on a bad result at the time. Adjusting to performance vs adjusted to a past performance. Markets change and Friday afternoon might turn out to be the best time to trade.
Where to find the contradiction.
If rules are based on limits there is always that last rule, know when to break the rules. What is the point of a rule if you are going to break them? Limitations already have built in criteria for taking action. The problem with limitations is then the responsibility lies on the trader not a piece of paper sitting next to them when they trade. It requires doing the homework and making the right adjustment. It means getting it wrong the first couple times or at any point in the future. And hardest of all it requires having a reason for every action and understanding in real terms (don’t rely on your memory) what those actions caused.
When you are dealing with anything dynamic, like people and markets, you have a choice in how to deal with it. Yes there are times when you have absolute power over people and can make them conform to you. It is easy in the beginning but it causes long term issues. You are rarely ever going to be in a situation where you have power over the market. Consider acting accordingly.
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