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Intuition is a sublime virtue that a lot of traders have false beliefs about. All beginning traders confuse intuition with "into wishing." It is extremely easy for the novice trader to listen to the thoughts and desires of the unconscious mind, and enter or exit a trade because of "gut feel." However, every outstanding trader possesses intuition and uses it on a daily basis. Even the great system traders who are totally mechanical use intuition in developing their computer-based trading methodologies. |
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However, many traders confuse an impulsive or irrational thought that originates in their unconscious mind with a valid intuitive thoughtafter all, intuition is a spontaneous thought originating in the unconscious. The ability to differentiate between the two is often sublime and illusive. Your unconscious mind is always seeking excitement and action, and is very effective at convincing you that you have a really strong intuitive feeling about what the market is about to do. I cannot stress strongly enough that all new traders should ignore any and all intuitive (gut) feelings about trading the market. The only intuitive thoughts that a new trader should act upon are those they can use to develop a methodology. |
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If you are just starting out, write down all your intuitive thoughts concerning the market in your trading journal. Continue to write your intuitive thoughts on the market for the next 12 months (at a minimum). After several months, start reviewing your journal so you can begin to generate your references about the quality of your intuition. You will begin to see how well your intuitive thoughts and feelings perform. Then after you have worked at increasing your virtues and creating empowering beliefs and are consistently making money over the next 12 months, come back to this chapter and reread it. New traders should use their intuition to develop their trading methodology, not to enter into or exit a trade. Believe me, your bank account will be happy that you did! |
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Intuition is a very important part of every trader's life. It is what allows you to grasp a concept and implement the concept without understanding all the underlying principles. It is what allows you to recognize a certain behavior of the market even before all the characteristics of that behavior become obvious to your conscious mind. Intuition is what allows you to override your methodology once in a blue moon, thereby increasing your profit or avoiding a loss. Intuition is what allows you to have the breakthrough in designing your trading methodology and, consequently, dramatically increasing its profitability. |
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In a book written by Jack D. Schwager, Ed Seykota summed up the danger of intuition perfectly: It is very, very easy to confuse intuition with |
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