Trading based of an (educated) gut

Beginner Questions
1

Hi all,

Firstly great community and I’m very happy to be a part of it.

I’ve recently started with Forex (2 months study and about a week “demo” trading so far).

I’ve looked into a lot of “strategies” and “formulas” and none of them really appeal to me. I don’t like systems like that.

I’ve been following a lot of news sources, market channels and listening to commentary and so far, my modest “demo” account has gone from 10k to 15k.

What has been successful for me (so far) is making trades based on my “gut” - where I feel the market is going.

Is this viable? Can successful traders operate like that?

A bit of background, I have a decent share portfolio and have owned a successful business for 10+ years. I’m very up to date with news, market trends and directions various economies are heading.

I don’t have a specific “goal” I’m working towards. My business (almost) runs itself and I draw a nice income from it. I seem to quite enjoy Forex and appear quite passionate about it and look forward to doing it long term.

2

No, and if your gut was right all the time, you should be a fortune teller making alot of money.

We can call it intuition skills, been there, seen that type thinking. Sure, you might remember patterns,and things like that, but patterns are made to trick you. The big institutions know where they want the price, and they will drive it where they want it.

You dont have enough time under your belt to have a large inventory of visual database to say, " You seen it all", or Ive seen this before.

The news is there to misslead you. They have no idea whats going to happen. They speculate their assumptions based on many varibles, then tell it like THEY see it. If they were so good at making calls of the price, why are they sitting there telling stories about what they think will happen? Because they are wrong, mostly like everyone else in this business, more frequently then right.

So no, Gut feeling isnt sustainable.

Im a firm believer in a mechanical minded systems, simple yet fruitfull. With thresholds in place for bad assumptions.

Your new to this business, find a simple price-action system, and work it. Keep notes, aiming at what you can do better tomorrow, and how the strategy is performing.

I once ran on gut feelings, its just a circle of madness and wasted time and effort over the long term.

Congrates on the hands off business, throw $20 in an account, and practice, practice, practice,

Great pips to ya in the future, Ethan

1 Like
3

While I may not share the tone and tenor of MoneyNVRSleeps’ post, I agree with him on the gut side of things and his recommendation to get into live trading.

A LOT of people say they do great in demo trading, but not so many do great trading with real money. It’s a different beast. This might not make sense if you’re inclined to have a rational point of view, but it’s the truth if you don’t trade entirely mechanically. There are all sorts of ways it messes with your head without you even realizing the impact that’s having on your decisoin-making. Get in there and be exposed to all that. You could learn a massive amount about yourself that relates to how you develop your trading moving forward.

In terms of your own experience and how it could contribute to your gut feeling. One of the biggest confusion new traders have with respect to news is that the market doesn’t go the way you think it “should” based on the information released. I’m not saying understanding the news and broad trends isn’t important. You need to spend time seeing how that plays out in the market, though, before you can really trust your gut.

The last point I would make is one of attribution. Do you know with a high degree of confidence what the source of your trading success has been thus far? Have you documented the thought processes which have gone into your trades? Are you up 50% because of a small number of big winning trades? Or have you made a larger number of smaller gains? What sort of risk are you taking? Hopefully you see what I’m getting at.

4

I also agree with both your posts, above, on both gastrointestinal and statistical levels.

5

Totally cracked me up…