Last week I wrote a piece called “Intuition and Trading” where I talked about how to identify when our intuition is really working for us or against us. I also discussed how that intuition is formed over time and with experience.
That little article sparked some good, healthy debate with some of you. I’m so pleased it did because it has been my experience that discussing these broader issues is what creates the opportunity for us to really delve into our own insights and beliefs.
When a trader gets to the point that they’ve been trading for a long time (years, not months) and have developed, through intrinsic learning, a “feel” for the market and the charts they can often do more discretionary trading than they realize at first glance.
A word of caution: many students feel that they’ve come to this point TOO early in their process and it is easy to misidentify exuberance, fear or greed as intuition.
Trading, especially in the beginning, needs to be extremely methodical. In order to allow a person to keep putting one step in front of the other there needs to be a routine, planning/record keeping and a system that is followed regularly – religiously even.
After a good string of successes a trader does start to develop a “feel” for the market, unfortunately most traders begin to trade off of that “feel” alone and they abandon the routine, planning and system that made them successful and began to give them the intuition for the market in the first place. They begin to believe that they’re above the routine. They get a little lazy and stop doing the planning or record keeping; they believe their intuition is enough. They get overconfident or greedy and abandon their system, usually getting in early or trying to hold on a little longer, just to get a few more pips as they put too much stock in that “feel” of theirs.
That little bit of intuition that was being developed through presence and practice has faded…all but disappeared. Needless to say it isn’t long before they’re losing.
If the trader is smart they’ll take a break and then return to the repetition and routine that works. However this time they are usually hesitant about their system and it seems their intuition is telling them to stay out of trade when it is really fear that is speaking to them.
Eventually that trader can recover losses and become successful once again, but imagine the discipline and practice it takes to get there. It isn’t easy and every time a person repeats this cycle it is harder and harder to recover from it.
You will develop a “feel” for the market and over time, through experience, it will strengthen and bring you insights that the trading alone cannot. However it is vitally important that you recognize that “feel” as an additional ally, an extra tool that helps you hone your trading…it is absolutely essential that you do not allow it to completely replace everything else you use that makes you successful.
Always understand the true underpinnings of your intuition and do not mistake extreme emotion (fear or greed for example) as insight.
That little article sparked some good, healthy debate with some of you. I’m so pleased it did because it has been my experience that discussing these broader issues is what creates the opportunity for us to really delve into our own insights and beliefs.
When a trader gets to the point that they’ve been trading for a long time (years, not months) and have developed, through intrinsic learning, a “feel” for the market and the charts they can often do more discretionary trading than they realize at first glance.
A word of caution: many students feel that they’ve come to this point TOO early in their process and it is easy to misidentify exuberance, fear or greed as intuition.
Trading, especially in the beginning, needs to be extremely methodical. In order to allow a person to keep putting one step in front of the other there needs to be a routine, planning/record keeping and a system that is followed regularly – religiously even.
After a good string of successes a trader does start to develop a “feel” for the market, unfortunately most traders begin to trade off of that “feel” alone and they abandon the routine, planning and system that made them successful and began to give them the intuition for the market in the first place. They begin to believe that they’re above the routine. They get a little lazy and stop doing the planning or record keeping; they believe their intuition is enough. They get overconfident or greedy and abandon their system, usually getting in early or trying to hold on a little longer, just to get a few more pips as they put too much stock in that “feel” of theirs.
That little bit of intuition that was being developed through presence and practice has faded…all but disappeared. Needless to say it isn’t long before they’re losing.
If the trader is smart they’ll take a break and then return to the repetition and routine that works. However this time they are usually hesitant about their system and it seems their intuition is telling them to stay out of trade when it is really fear that is speaking to them.
Eventually that trader can recover losses and become successful once again, but imagine the discipline and practice it takes to get there. It isn’t easy and every time a person repeats this cycle it is harder and harder to recover from it.
You will develop a “feel” for the market and over time, through experience, it will strengthen and bring you insights that the trading alone cannot. However it is vitally important that you recognize that “feel” as an additional ally, an extra tool that helps you hone your trading…it is absolutely essential that you do not allow it to completely replace everything else you use that makes you successful.
Always understand the true underpinnings of your intuition and do not mistake extreme emotion (fear or greed for example) as insight.
