Trading with Instinct

Filed under: Learn Forex Trading |

An aspect of forex trading that is not often talked about is that of having an instinct or a ‘gut feeling’. It is probably not talked about too much because we all like to think of trading as an objective, mathematical enterprise. However, there is a great deal of subjectivity involved in trading, and many experienced traders use their gut feeling and instinct to great effect.

 

The term ‘gut feeling’ is misleading because none of this actually happens in the gut! It is of course all going on in the brain, and the brain stores an incredible amount of information. The most important information is stored in our conscious mind, and we can retrieve these memories whenever we need to. However, there is also a lot of information that is stored in the unconscious mind, and this is where all of those trades gone by are stored.

 

When we look at a trade setup, we might have a particular feeling about it. It might tick all the boxes of what we are looking for, but we still have a negative feeling about it. This is probably because we have seen this kind of setup before and it has not worked out very well. Conversely, we might see a trade setup that doesn’t tick all of the boxes, but for some reason we have a really good feeling about it. This might be because we have not taken this kind of setup in the past and watched a potential profit slip though our fingers.

 

However, I must warn you, that these kinds of instincts should only be listened to after years of experience in the field. Beginners also have feelings about a trade of course, but often these are not based on experience, and are false instincts – so… beware!

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>