Forex and the Unconscious Mind: Trading With Your Gut

Filed under: Learn Forex Trading |

Screen shot 2013-01-15 at 10.25.00You may be familiar with the term ‘trading with your gut’. This refers to having a ‘gut’ feeling about the market, and trading according to those feelings. This might not seem like a very objective methodology, but psychologists would say that it is, to some extent, a valid method.

 

When you look at a forex chart, your unconscious mind stores all of the information and records any relevant patterns. Therefore, when you take a trade, and it does not work out, your unconscious mind remembers this. Some information, information that is important in our everyday lives, is stored as conscious memories. However, other information, information that is not crucial to our everyday existence, is left on our own biological hard drives to pile up.

 

When you see a forex price action setup, sometimes, all of the parameters are correct and fit in with the rules of your trading methodology, but something just does not feel right. This is you gut talking to you. Probably, at some time in the past, you have seen a similar setup that did not work out, and your unconscious mind is telling you this.

 

These gut feelings are something that you can fine tune, and the more screen time that you have in front of your charts, the more this gut feeling will become polished. That is not to say that sitting in front of your charts all day is a productive endeavour, as it is looking at possible setups that is useful experience to get (not looking permanently at charts). After perhaps one to two years of forex trading, you should start to get a gut feeling about certain setups, and if you listen to this feeling, then it might well improve your bottom line profit and loss figures. It is certainly something to think about…

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