Today's Quote: “Science is nothing but perception." Plato.

You probably have heard someone say at some time that trading involves a good deal of ‘art’. You maybe have discovered that yourself. However, doesn’t this run right in the face of trying to be ‘objective’? Don’t we really want to be ‘scientific’ in our trading, and leave our ‘subjectivity’?

The concepts are not identical. That is to say, objectivity is not identical with being scientific; and subjectivity is not identical with being artistic. To be totally scientific cannot work in the market by definition. Why? It would mean that you would need to have a ‘perfect’ system. An indicator or formula or strategy that always works. We know that this is possible. A perfect ‘system ‘would be copied by all and be rendered useless. A ‘perfect’ system is one that is a ‘method’ and must have human intervention, must have interpretation. That is why using a system that you understand and believe in is critical.

So how do we intervene, to get the ‘edge’? That is where being objective comes in to play. When you need to make a call if the current trend is up or down, you could let your emotions decide, and make a random choice by how you feel the market is trading at the current time. Or you can use a set of spelled out objective criteria. Where are the last highs and lows on what chart? Where is the TICK, where is the TRIN? What is the market internals?

In other words, you should use objective criteria when you evaluate your plan. Your plan may change based on this evaluation. It must from time to time. This is where the ‘art’ of trading comes in. There are times where 2 excellent students of the market can look at the same charts and draw 2 different conclusions. This is not only acceptable; it is necessary in the markets. Your job is to make sure that when you are right, you do well. When you are wrong, the pain is minimal. Then try to be right a little more than you are wrong. This is why they call it the ‘market’.