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Where Art and Science Diverge

First, let us be perfectly clear where art and science part company. Rules are rules. They are specific, operational, mechanical, and exact. Anything that diverges from these rules constitutes a change and/or violation of the trading system, method, or indicator. Therefore, it should be perfectly clear when a trader has violated the rules of his or her trading system. Note here that trading systems that are not perfectly clear in terms of their rules, are sitting ducks for rule violations that may go undetected. Hopefully, the methods and systems I have presented in this book are sufficiently clear, precise, and operational to allow a clear and concise determination of when rules are being violated. Therefore, any change in the rules constitutes a violation of the system and is clearly a step into art as opposed to science.

Art and science diverge when trading rules are changed, when trading boundaries are overstepped, and/or when specific procedures are altered. What were method and system now become art and intuition. The ability to discern and distinguish between art and science will be facilitated if your trading rules are specific and highly operational. Hence, I advise you to devise and follow precise and concise rules that are defined as clearly as possible. In both the long and short run this will be a great benefit to you. I do not discount the role of intuition; however, I assign it minimal importance.

When Science Has Been Transformed into Art

Clearly, the lack of specific and operational trading rules will precipitate the crossing over from methodology to mythology. In the long run this will not serve the trader well. It will prompt an emotional and intuitive trading style that will likely have losing results. There is, therefore, no choice but to do the following:

ж Be aware of when your trading rules have been altered, violated, or circumvented.

ж As soon as you are aware of the above, act accordingly to remedy the problems.

ж Attempt to deal only with specifics when it comes to trading. Matters of opinion, expectation, and prediction are useless and counterproductive in a successful approach to day trading.

ж Above all, maintain a fully disciplined approach to your day trading.

ж No matter how intuitive you may be, remember that a methodological and operational approach to trading will ultimately prevail. Minimize your reliance on intuition.

ж Refer to your trading rules frequently.

ж Remember that even the slightest change in your methodology could have a major impact on your results.

ж Know that just because a change in your system that has violated the rules has worked for you in the past, it is by no means an indication or a carte blanche that the same change in rules will work for you again.

ж Refer to your trading rules as often as necessary in order to make certain that they are literally burned into your conscious and unconscious mind.