Adaptability in Trading: The Map Is Not the Territory

Trading often relies on models, strategies, and expectations - a kind of map we use to navigate the markets. But as the mental model The Map Is Not the Territory reminds us, the map is only a representation, a simplification of reality. It’s useful, but it’s not reality itself. The market is the territory, and it’s dynamic, shifting in ways our maps can never fully capture.

Consider recent expectations: BTC dominance eventually stagnates and declines every cycle, signalling an alt rally, or the start of the year injects fresh liquidity to kickstart new runs for altcoins. These are maps - models built on past patterns, abstractions of what has worked before. But when BTC.D doesn’t drop, or alts remain stagnant despite expectations, the territory has changed. Clinging to the map at this point isn’t strategy - it’s denial.

Reality is the ultimate update. The best traders don’t just follow maps; they redraw them continuously based on what the market is revealing. They understand that maps reflect the biases and limitations of their creators (including themselves) and embrace the need for flexibility.

Trouble often arises when we mistake the map for the territory - trading the model instead of the market. A model isn’t sacred - it’s a tool. If the market evolves, our tools must evolve with it.

Adaptability in trading means treating strategies as living documents. The map can guide us, but it should never stop us from exploring new territory or revising our understanding. 

Success in life and markets doesn’t come from being the strongest or the smartest, but from being the most adaptable to change.