Legalism is often the word slapped onto those who say anything about how Christians "ought" to live. It is true that Legalism is prevalent today. There is a conservative Legalism and a progressive/liberal Legalism. One could even say there is a Legalism for "Moderates" too. All of these ought to be rebuked and rejected.
But, what is Legalism? Legalism is adding anything to God's Word and saying that Christians "ought" to live according to those things (Mk. 7; Rev. 22:19). It is commanding more than the necessary and wise application of Scripture. It is the thinking that our traditions or cultural trends are just as relevant or more binding than God's Law. Legalism is also the mindset of taking God's good commandments and thinking that our obedience is what earns God's love or salvation or contributes to Christ's redemption. It is when one downplays the active obedience of Christ and His fulfillment of the Covenant of Works.
But, Legalism is not any presence of commandments or "oughts".
Christians are called to obey God's Word (Mt. 22:37-39; Rom. 8:29; 12:1-2; Eph. 2:10). This is not Legalism. Christians are not called to obey God's Word in order to be saved, stay saved, earn God's love, or add to Christ's work (Gal. 2:16-3:14). But, it is equally misleading to say that none of God's commands apply to Christian living today. This is the error of Antinomianism. Antinomianism (lit. "not Law") is the thinking that because I am saved I can live however I want. Antinomians think they don't need to obey God's Law because He has forgiven them and will always forgive them. While it is very true that God has forgiven us fully, freely, and finally, it is not true that this then gives us the license to continue to embrace sinful lifestyles and identities. While it is true that God will always continue to apply the blood of Christ to sinners who trust in Him regardless of how wicked they are in the future, it is a perverted and sinful thought to think that because of this truth it doesn't matter how I live so I might as well not strive to repent.
The problem with both Legalism and Antinomianism is that they both idolize self. Legalism thinks that one is capable of being good enough to earn God's grace. Antinomianism thinks one can live according to their own desires and not worry about what God thinks. Both of these are mindsets of loving self more than God.
Christians are called to obey God (Jn. 14:15; 1 Pet. 1:16; 1 Jn. 5:3). But, Christians are not called to obey God in order to earn His grace. Christians are called to obey God because they are graciously empowered by His Holy Spirit. The Christian never puts trust in their own repentance or obedience at any time in the Christian life. After all, every bit of our repentance, desires to love God, and any good works are sovereignly given to us by God alone (Phil. 2:12-13). They do not come from us. We repent of trusting in ourselves and our works. But, those who are genuinely born again grow in a desire to live more like Christ and less like their sinful selves.
The professing Christian that displays no evidence that they are striving to obey God is one that should not assure themselves that they are saved (1 Jn. 1:5-7). When one receives a new heart (Ek. 36) they will want to grow in obeying God's Law (Jer. 31). They will do so by fixing their eyes of faith upon Christ (2 Cor. 3:18) and the grace of the gospel (Rom. 1:16-17) in order to receive the power and desire to obey God (Jn. 15).
This obedience (this side of Heaven) is never perfect. Just read Romans 7, Galatians 5, and 1 John 1:8-10--and all the Old Testament. Matter of fact, the more mature you become the more sensitive you are to your sin and often feel more sinful than you were before (1 Tm. 1:15). Nevertheless, this obedience is one that any genuine Christian will desire to grow in more and more. There is no perfection this side of Heaven (1 Jn. 1:8-10). Even the greatest growth in holiness here is little compared to the glorification in Heaven (1 Cor. 2:9).
You know you're growing in love for Christ the more you want to live like Christ. You know you're growing in love for Christ the more you want to attend to the means whereby He grows you. The only way to grow in this obedience is by attending to His means whereby He communicates the benefits of His redemption. That is: Preaching of the Word, Prayer, and Administration of the Sacraments (Acts 2:42-47).
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