The dictionary defines "arbitrary" as "making abrupt or subjective decisions." The purest and simplest trading method avoids arbitrariness. Are there examples of arbitrariness we can examine? Let’s consider one of the most arbitrary trading systems imaginable.  

For instance, suppose we refuse to lose more than $300 on any trade. Why $300 instead of $200 or $400? This might be the most arbitrary decision we could make. This action has no connection to the market’s current behavior. In some markets, a $300 stop-loss might be excessive; in others, it might be insignificant.  

Now, suppose our system also states that we should set a $1,000 profit target—once a trade reaches $1,000 in gains, we exit. Again, we must ask: Why $1,000? What does this have to do with the market’s current trend?  

A less arbitrary approach would be setting stop-losses based on daily volatility. After market fluctuations widen the price range, we could adjust the stop-loss accordingly. But this raises another question: How many days should we use to calculate the average range? Ultimately, even this method still contains arbitrary elements.  

Suppose we want the market itself to dictate our trading rules—this is a good idea, but how do we implement it? We might say, "We’ll buy when the market breaks above the previous high." Great… but which previous high? The last one? The most significant one? How do we define "significant" versus "insignificant"?  

The example above is the least arbitrary approach we can take because we allow the market, as it enters new territory, to signal its direction—toward a place it hasn’t reached recently.  

Instead of a fixed $300 stop-loss, if we’re long, we could place the stop just below the market’s most recent low. This is the least arbitrary action we can take… but which recent low should we choose?  

As for the $1,000 profit target? The least arbitrary approach is letting the market tell us when to exit. One method is to trail the stop-loss along with the market trend until it’s triggered.  

From this, it’s clear that if we aim for the simplest and purest trading method, we must embrace the least arbitrary actions possible. We must let the market guide our decisions.  

What we *don’t* want to do is impose our parameters on the market… we shouldn’t try to tell the market what it "should" do. We must submit to its current trend. If what we’re doing aligns with what the market is doing, we *will* profit—and that is the essence of trading.