Judging Intuition’s Roots
Last week I wrote a piece called “Judging Intuition’s Place” 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.
Triffany Hammond helps traders of all levels, gain the tools, resources and guidance necessary to build on their strengths and work around their weaknesses so that they can make the best possible decisions for themselves in the Forex Market. Triffany is a regular speaker and contributor at 
So the upshot of everything really just says … forget about it !!!
No, not at all. The upshot is to give your the part of yourself that knows how to connect time to learn that connection fully. Don’t abandon what works out of laziness, greed or fear…rather embrace the process that is making you more intuitive. Love the work that goes into the success so that you can create more intuition and therefore more success.
I have found this great test, I think everyone should have a go at this …
http://www.tharptradertest.com/
Its a personality test about what type of trader you are, and it produces a 2 page report as to what type of trader you are and where your strengths and weeknesses are. I did it, and it really hit the nail on the head. Have a go, its fun !!!
[there are 15 types of traders you could be, 2 are listed as succesful for sure (no i was not one of those) 3 who need a lot of help and the rest need a little help … i am sure most people will fall into the middle section … I am a “Detailed Trader” …. let me know what you are ? (thats you Triffany as well by the way
)
Thanks Aby! This test is a great resource and starting point… I took a version of it ‘years’ ago, I’m pretty sure there’s more questions now.
Gave me a chuckle… I’m a “Socially Responsible Trader”, LOL
Would love to get an idea of all the others and some insight behind it’s development. 15 types seems like a lot to me.
I have read many books on trading, the Essentials of trading, How to day trade forex, 10 steps to … etc. I have read the biographies of traders such as Livermore, Soros, Buffett to name a few. These 2 articles have confirmed what these books proved – that in my opinion while books may tell you ‘What to’ and the biographies showed you ‘What they did’ they cannot tell you the REAL why to. Why did these traders trade some of their biggest trades with subsequent huge profits seemingly against the grain with little empirical evidence in favour of the trade. So can trading really be taught? Certainly the ‘what to’ can. But the feeling, the ‘why to’ – I don’t think so. Like Triff says, sometimes its an accumulation of all known knowledge with the result churned out by the subconscious. And sometimes ‘you just know’ – and how do you teach that?
Hmmm Thats a bigger conclusion, is it really that up in the air, Hutch ? There is always evidence to show that things will change, it is only that the regular trader, the guy on the street choses to ignore those signs, as the possibility that things are not going to work out is never in anyone’s head or that things will change the status quo is not what we like to think, whilst the seasoned trader knows that this is the early bud of a bigger change. These big traders made their money because they saw those signs and didn’t ignore them, maybe it was part of their intuition not to ignore those signs, but it wasn’t a puff of smoke. Lets take the credit crunch as an example, I was told in 2006 by a trader that commodities prices are just too much and something is gonna give and its gonna go way down. He was a year and a half or so off, and I completely forgot and ignored what he said as a rant of a man who just wants to say something big … but for him the signs were there, he took them seriously but I didn’t cos, the economy was good everything was going up, what does he know ?
Yeah, certainly the ‘what’ can – the Turtles put that to rest. But the intuition side of it is way too personal – no 2 people are alike. It’s like saying ok now I want you to make your new favourite fruit blueberries, it doesn’t quite work like that.
The general process can be taught… but how it shows up is really not predictable I guess. Like learning anything really, the rest is up to the student.
These books are still great reading nonetheless!