Intuitive trading or a gut feelings about the markets. Do you have them?

Beginner Questions
#1

Do you believe in intuitive trading or unconscious pattern recognition? I think most people on this forum use techniques that are highly logical and take conscious effort. But have you ever gotten that feeling that you know the markets going to do something based on something you have seen before? maybe its a price formation or the way the market is “acting” but you just get a feeling something is going to happen. Do you act on that information?

I have seen some very dichotomous traders, who can trade completely technically but still have these feelings. Even take entire trades based on it, but when asked they can always come up with their reasons, usually based on past experiences. I personally have these feelings, but as a person who is completely rule-based I dont give in to them unless they fit inside the boundaries of my plan.

I do think that the human mind is a filtering machine, it can sort more information than we can consciously access because it takes up too much space. So I have tried to incorporate these feelings into my trading but determining the technical roots or past experience trades and see if i can take an action inside my trading plans boundaries.

I am curious to the people out there, do you have intuitive trading or gut feelings about the markets? What do you do with those feelings? Would you take entire trades based on these feelings? Can you explain your feelings?

How important is Intuition in Trading?
#2

When you’ve been around something long enough, sometimes you just know.

I recall Val Kilmer in a movie called First Sight. It was about a blind guy that was restored his vision. In the movie, there was a seen where he saw his love interest have an expression on her face. He couldn’t read it. He didn’t understand what the face meant. Off hand, I don’t recall what the face was, but the idea behind it still stands. You just get a better read of things overtime the more you are presented with them.

It’s been quite some time I actually put an indicator on my charts. I trade for the most part on pure price action. But it’s not just a gut shot feeling. There are patterns, etc, that I look for. However, when you see enough candlesticks you get a sense of the market’s movements. For me, the picture is more clear on a daily chart. That’s why you might hear it deemed as just noise when people are on smaller timeframes like a 5 second or minute chart.

So for me, when I see a pattern that looks good, I am also mindful of the environment it’s in. From there, I make a decision whether or not to get into the trade.

There’s a science to trading, and then there’s an art. It’s easy to teach the science of it, but the art of it I believe can only be self discovered.

#3

You both are talking about looking at the market how it is not how you think it is. Let’s say you trade with GBPJPY, and for one hand you have watched the latest gbp rally, and the news of british recovery, it is obvious, gbp is recovering. But now if you look again you’ll se a bear formation added to the contradictorious UK reviews and people who might be in panic for a bubble added to the recent japaneese recovery, it is obvious it might be bearish.

Just take an example the battle of Gettysburg, the Pottomac army faced the Rebs for almost three days and interrogating prissioners, they found they have arrested rebs from every regiment except the virginians, those under the command of General Picket. The Northens knew that was a huge force and it did not get into action jet. Those were the facts. Now the estimated was that Lee would use that force but such a force it could only be deployed trough the center (and hence Meade reinforced the center of Gettysburg line) and Lee would do excactly what he did days before in Fredricksburg because the conditions were almost the same, so Lee ordered a mass bombing as he did in Fredricksburg but with no effect and sent Pickets divission direct to the butchery, that is how Rebs lost Gettysburg battle with almost 20 000 men killed. Now what were the facts and who made the propper calculation and who made the stupid move. Lee had no backup plan, Meade instead placed Chamberlains divission at the rear center, for two reasons, one because they needed a backup plan and second, Chamberlains men had the worst part of Gettysburg and so they needed a rest but also it would be a psicological effect against the Rebs if they had to face Chaamberlain again.

So after dfeating the rebs Meade decided not to go after Lee, Pontomac army was just too tired and the gettysburg was a victory enough to upraise the Unions moral.

So for one hand we had Lee who had advanced enough through Northen territory but wasted all in one single struggle with no objectvive, and form the other side we have Meade who used every resource available and took every caution needed and didn’t risk to lose what he achieved, Meade wouldn’t do the same mistake as Lee.

Trading is a battle between you and the rest of the world, most traders just waste time in small profits and have no objective, Art of War applies here too, “Seek the conditions for victory and then fight”. You must have a clear objective and exit point and a way to look at the market how it is, study the opportunities and then just then pull the trigger.

Regards.

#4

come on mastergunner be honest here its not that sometimes you just know but its that super cool decoder ring you have :stuck_out_tongue:

In all honesty here there are some nice points made. I will give my opinion on this. Its only my opinion so take it for what it is. The way I see it scalpers (or my definition of scalper anyway) have to trade more on instincts simply just due to the violent nature of the markets on lower timeframes. As for me I (like mastergunner) prefer to stick to the daily. So I tend to more anticipate the market as I will wait for price to pull back to a level before looking for entries. I guess you could classify anticipation as a gut feeling as I really have nothing to really tell me price is going to go to the level I am anticipating to start hunting my entry. Now once price does reach the level I was waiting for then I will just use routine signals to get in. However I posted a trade on nikitas thread pure price action for dummies I took last night. I mention that trade because just before I took the trade I mentioned I was watching it setup and stated what I was looking for to enter based off what I routinely look for. However while watching price instincts told me price was not going to do what I was looking for and the move was unfolding right then and there. So I entered since the stop was on the higher side than I care for but well withing my risk level. Now I am sitting on a nice little swing trade and got in at the top (shorted the pair ;))
So instincts can be good but never try to place trades on that alone. Reason is most people watch many pairs and when you do that instincts IMO are not up to par. All pairs act similar but never the same. I acted on instincts last night but at the same time my trade had setup I was just looking for the precise entry and realized it was not going to give me what I wanted this time around. I also pretty much only trade 1 pair the AU. I have been watching that 1 pair for a few years now. I understand how it acts and reacts to levels. Thats why I uderstood the move was happening now and not giving a better setup get on board or wait for the next boat. Missed 20 pips from the top of 100+ pip move (although it is in a pull back right now :(). Pull backed are good sometimes though as since I traded off instinct and not routine I kept risk as low as I could so this pull back is shaping to offer a chance to increase lot size and still be in a free trade. :slight_smile:

#5

Scalping is too dam exhausting anyway.

#6

Agreed scalping can be profitable but I dont see the point. This is a cut throat business. With that said why scalp when you can take the whole head off

#7

Firstly i would just like to say thank you for posting this thread. Its the best thread posted in a long time.

Intuition means:

[I]The ability to understand something immediately, without the need for conscious reasoning.[/I]

There are 4 stages of learning

1 - Unconscious incompetence
2 - conscious incompetence
3 - conscious competence
4 - unconscious competence

What you are talking about is what happens when you trade at an elite level. Its called [B]Unconscious Comptence[/B]

The skill becomes so practised that it enters the unconscious parts of the brain - it becomes 'second nature’
common examples are driving, sports activities, typing, manual dexterity tasks, listening and communicating
it becomes possible for certain skills to be performed while doing something else, for example, knitting while reading a book
the person might now be able to teach others in the skill concerned, although after some time of being unconsciously competent the person might actually have difficulty in explaining exactly how they do it - the skill has become largely instinctual
this arguably gives rise to the need for long-standing unconscious competence to be checked periodically against new standards.

My brain is the best and most dynamic indicator because it has a massive back log of information to access and can see things other people cant in the chart. Me trying to explain what its like to see a chart through my eyes is like trying to tell a blind man what it’s like to see. Sometimes i don’t know how i trade i just do. Im doing a series of training videos right now and i’m terrible at them because i find it hard to explain. How do i explain something that is now natural. How would a natural basketball player explain how they get the ball in the hoop? But i can write articles on my trading methods and mentality easily.

This intuitive trading and gut feeling is also part of being in sync with the market. I have 15 setups that i follow at any given time and they have all been written down which is my trading plan. This helps me to be in sync. However since i have it written down it decreases my intuition and gut feeling and i miss out on some trades, because im looking at my setups that i wrote not the chart. But at the same time when im writing my setups based mostly off intuition since i can write my set-ups without thinking too much… Sound counter intuitive, i know. But this is also a tricky question lol.

Just recently i missed out on a trade on the AUD/USD just because i was looking at my trading plan instead of the chart. My filter in my eye was saying “it hasnt reached that level yet so just move on to the next chart” but i should of been looking at the chart with fresh filters because there was an obvious trade 3 method continuation pattern and a break below the 200 day SMA and various other bearish signals. I would be in profit right now with the my stop loss at break even. Anyways went off topic but hope someone learnt something.

#8

I would have never thought about the 4 stages of learning and generating these feelings. Nor would I have imagined that I had anything near the unconscious competence level of learning. I always put myself at Conscious incompetence.that must mean that people who have reached that unconscious competence level have actually experiential based feelings versus newbies who have feelings about the market but may not be based on past action. How would someone know they have reached that level of internalized past patterns vs just making stuff up.

#9

Great point and i will explain as best i can.

Bruce Lee is a good example. He said you need to practice and practice and practice some more so when someone attacks you you JUST MOVE without even thinking in a blink of an eye.

When you are learning to drive you are terrible then after 1 year you can drive easily without even thinking.

These days when i look at a chart its just automatic. I know what levels i should be getting in. Today i was trying to explain something to someone about trading. When he was going back in history on the AUD/USD i could see every single trade i would of taken without thinking too much. I guess my filters in my eyes are so used to seeing what’s important in a chart that it’s able to filter out what is not important based on my method.

#10

Nice…but wouldn’t really trust big money moves just based on just guts and glory alone…but that’s world’s apart from intuitive trading, there’s a thin line between the two.

#11

Hmm… difficult one to answer definitively? Some nights I’ll be looking at PA on the Asian and will take an early entry (rather than early London) based on what I figure the next day will do (based on loger tf’s tech’s). I suppose you’d call that intuition? But mostly I’d class myself as a mechanical ‘tech’ trader. This game is tough enough without ‘gut feeling’.

Trade what you see, not what you think! :slight_smile: