Joe Ross
New User
Jun 6, 2008, 2:41 PM
Post #1 of 1
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Becoming an intuitive trader
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Intuitive trading is the height of trading as an art form. Traders with many years of successful trading experience are generally the ones who attempt to subjectively trade the markets. Intuitive trading comes with experience. But even for experienced traders, trading markets without rational, price action analysis is often just gambling on an irrational emotional feeling. There must be an objective reason for every market action. If there is none, then a subjective approach is being used to trade the markets.
Beginning traders will lose money over 95% of the time subjectively trading markets because their emotional responses perceive price action irrationally. I think that a price-analysis based trading approach is the best education for a beginning trader. This may even include the use of indicators, which is why I presented them in my books. Until you are somewhat intuitive as a trader it is better to go with some form of technical analysis. However, be aware that until you understand market dynamics, technical analysis will not make much sense.
After years of technical trading experience, the successful trader will know when and how his methodology will fail under specific market conditions. The master trader becomes a master trader by taking consistent repetitive actions under specific market conditions recognized by the master.
There are inherent drawbacks in assuming hypothetical trading system results can be duplicated in actual market trading. The biggest of these drawbacks is that the hypothetical protective stop loss order was not in the market. Insiders key off helpless protective stops in the markets like sharks sensing the smell of blood in the water. A $600 real time stop for a system trade may have been picked off by the locals, but a hypothetical system trade may have shown the trade as a $5,000 profit because the hypothetical protective stop was never in the market.
Trading using pattern recognition will produce the best results for most traders. This is the goal of most neural network software: to isolate consistently profitable patterns for individual markets. However, it has been my experience that what you see with your own eyes is infinitely better than what the computer sees with its limited vision.
Joe Ross
Trader, Author, Educator
"Get paid to trade" (JR)
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