gut feeling vs. analysis

[yari123]

which do you follow more? your natural instincts, or analysis. usually my instincts have been much more successful than doing over the board analysis in predicting the future.

how do professionals balance, or if not any, develop stronger rational analysis?

 

[TheBramble]

My initial forays into trading as an independent were TA-based, but with totally rigid and compelling overrides from instinct and intuition. After all my money ran out, I decided to stick to pure TA-based analysis and rigid trading rules. Almost 20 years later, I still stick to TA-based analysis, reasonably rigid trading rules with just a dash of discretionary intervention, small, but increasing amounts of what could be considered Fundamental Analysis and large doses of Intermarket Analysis.

The funny thing is, you'll find your intuitions and instincts get a lot sharper after putting in the hours for almost 20 years. The trick, it seems, is to be able to put in the hours for that sort of period of time and develop your intuition and instinct as an unconscious part of that process.

I know enough pro traders to suggest we are evenly enough distributed along the spectrum of totally rule-based to the totally discretionary for my view to be just my view. But, I don't know too many pro traders that have been trading long on a purely discretionary basis.

 

[new_trader]

The funny thing is, you'll find your intuitions and instincts get a lot sharper after putting in the hours for almost 20 years. The trick, it seems, is to be able to put in the hours for that sort of period of time and develop your intuition and instinct as an unconscious part of that process.

I have not been trading anywhere near this long but I understand exactly what you mean. I have put in countless hours of study and practice combined with live trading and I think my intuition has got sharper or "tuned" unconciously as a result.

 

[options]

Agreed. Repitition increases intuition.

Hours of screen watching do pay off as history repeats. But it also allows you to know a index, share etc and to pretty much 'guess' what it will do next.

But the same can be said of TA applied to the same chart for a period of years. You get to know 'when' the ta is correct.

 

[yari123]

thanks for the responses. now i am even more inspired to keep learning more and practice practice.

 

[rols]

Agreed. Repitition increases intuition.

Hours of screen watching do pay off as history repeats. But it also allows you to know a index, share etc and to pretty much 'guess' what it will do next.

But the same can be said of TA applied to the same chart for a period of years. You get to know 'when' the ta is correct.

Gut feelings are all very well until you start feeling sick.

Seriously I was reading some research on biofeedback devices and EEG stuff - you can wire yourself up and read charts of how you are feeling, and there is a trading coach who actually utilises these methods - costs $4000 for a days training + assessment.

The most interesting research is the one which points to the fact the human body senses 'changes' long before the brain clocks it. With a bit of training we can all develop these intuitions. The book 'Blink' covers some of these phenomena.

How many times have we been in a trade when a sudden uneasy feeling comes upon us? We usually deny these signals yet simultaneously and start peering deeper into the monitor desperately looking for either confirmation or rejection of our trade conditions.

I made a log of these feelings and found over three weeks 68% were correct.

Could this a STOP and REVERSE strategy I wonder?

 

[Rhody Trader]

My personal view is that intuition is nothing more than experience. I know that my best trades come when I can "see" the path prices will take before I make the trade. That's not some kind of ESP (I think), but rather years of watching price movement.

Experience most often trumps raw ability. Just look to sports for examples. The the rookie might be bigger, faster, and stronger, but more times than not the veteran will win out in the end because he's seen it all and can anticipate.

 

[hanzahar]

i think all symbols has their own charateristics if you look hard enough you'll know their behaviour and what TA to use on them

 

[nine]

Mark Douglas would argue that one should use NO intuition during actual trading time until one is a rock-solid performer at implementing their system.

There are two reasons:
- Until one is consistent fears and hopes will be playing large during the trades and can very easily be confused with legitimate intuition. The majority of these fears/hopes will play against your long term success (and long term is what matters).
- You might think your intuitions are better than your planned trades but I suspect that means two things: one is that your plan needs a lot of improving, and two is that, like most people, your memory plays tricks with you and you remember some things better than others. It can be emotionally satisfying (and memorable) to exit when you feel it and have the ticks turn down ... but if you'd held thru the retracement as your plan said ... would you have made more money?

So, if you're a consistent trader ... earning as much as you wanted for the last 12 months lets say ... then use intuition.

If you're not then note your intuitions down and record how well they went so that you can improve your system. Do what Rols said and make a log. Record the outcomes of the trade if you followed your system and if you exited by intuition. Over time this noting them down will help you learn which impulses are true and which are fears and hopes in disguise.

Good Trading :idea:

 

[zigglewigler]

Gut feeling for a new trader is otherwise known as guessing.

Intuition for experienced traders is otherwise known as skill, in all its various forms.

Traders watch, we can't do it blindfolded, so we pick up, often subliminally, what's going on.

 

[Ted69]

Hi,

My initial forays into trading as an independent were TA-based, but with totally rigid and compelling overrides from instinct and intuition. After all my money ran out, I decided to stick to pure TA-based analysis and rigid trading rules. Almost 20 years later, I still stick to TA-based analysis, reasonably rigid trading rules with just a dash of discretionary intervention, small, but increasing amounts of what could be considered Fundamental Analysis and large doses of Intermarket Analysis.

Is it right that you know in advance your good and bad trades that you could see on the historical data and do follow this TA system without any concerns?
What is the difference then just to run automated script to trade?

Ted