Trading with your Instincts

Filed under: Learn Forex Trading |

Although when beginning forex trading, you will have to learn to trade in a very mechanical way because you have no experience to draw from, later, you will have the added weapon of using your trading instincts.

 

When trading forex, over time, you look at so many charts and so many setups, that it is impossible to remember them all. We will perhaps remember one or two that were particularly painful or successful with great clarity, but the others will be nothing more than a blur or a feeling. Often, when looking at a current price action setup, we will get a certain feeling about it. This could be because we have looked at similar setups in the past. If those setups were successful, then we will probably get a good feeling about the current setup. If they were unsuccessful, then we might get a bad feeling about the current setup. This is our experience talking, and we should not dismiss it lightly.

 

The human brain works in wonderful and mysterious ways. We remember the most important events of our life in our conscious memories. However, the day-to-day stuff, the making of a coffee, the kicking of a football, and looking at a trading chart; all of this stuff is stored in our unconscious memories. It is like information that has been deleted from a hard drive. There is still an imprint of the memory there, but it is difficult to recall. Therefore, we get messages about these unconscious memories via ‘feelings’.

 

Many experienced forex traders have such good instincts that they come to rely on them as their primary means of deciding whether or not to take a trade. However, newbies should not listen to their feelings too much, as instincts should not be confused with emotions. Instincts are good, but where trading is concerned, emotion is not. Emotions can destroy a trading bank – so try to identify what you are feeling; and try to get in tune with your trading instincts.

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