Intuition and Trading

[Marlon 10]

With experience traders build intuition of the markets. They are able to understand market action, sense strength and weakness, and anticipate market movements through intuition. This seems to be the ultimate level in trading.

 

My question is: How long does it take to develop such intuition? How can one achieve this ultimate level?

 

Thank you.

[Soultrader 12]

It takes many years of market experience to get to that intuition level. Market understanding is a lifelong process. There is always something new to learn each trading day.

 

If you want to read about intuition and trading, there is a good book I picked up a few years ago.

 

 

The Intuitive Trader by Robert Koppel

[chaostrader 11]

With experience traders build intuition of the markets. They are able to understand market action, sense strength and weakness, and anticipate market movements through intuition. This seems to be the ultimate level in trading.

 

My question is: How long does it take to develop such intuition? How can one achieve this ultimate level?

 

Thank you.

 

Thousands of hours. I think to reach peak performance, one must be actively involved in the markets day in and day out for over 6 years. Stick with your strategies and plan. Intuition will develop naturally.

[Marlon 10]

Thank you for the recommendation. It looks like focus, concentration, and dedication is required to reach such levels.

[Piptrader 10]

You need to stick your mind into it day in and day out. Trading takes full concentration. I do not believe in trading part time. Anything part time is a hobby. Trading is a career.

[Blaze 10]

How much risk capital does an average newbie blow before he starts to make money?

[luke24.5 10]

How much risk capital does an average newbie blow before he starts to make money?

 

None ... If you treat it as you do any formal education for a good paying profession. $2-300 per month US will pay for a real-time datafeed, good charting and simulator. Once you can make money on the simulator consistently for at least 3-6 months, you've garduated and the return on your investment will be quicker than virtually any other profession.

 

If this is a 2 year process, it's still a cheap and quick education considering it's potential.

 

Now if you prefer the quick route that most use, you will blow in direct prportion to what you start with. And you will most likely blow out a few times over before you come to the decision that one cannot make money at this, or you decide to get the education and a few (very few, and most were during the 90's boom) have even got lucky and started making money off the bat.

[Soultrader 12]

None ... If you treat it as you do any formal education for a good paying profession. $2-300 per month US will pay for a real-time datafeed, good charting and simulator. Once you can make money on the simulator consistently for at least 3-6 months, you've garduated and the return on your investment will be quicker than virtually any other profession.

 

If this is a 2 year process, it's still a cheap and quick education considering it's potential.

 

Now if you prefer the quick route that most use, you will blow in direct prportion to what you start with. And you will most likely blow out a few times over before you come to the decision that one cannot make money at this, or you decide to get the education and a few (very few, and most were during the 90's boom) have even got lucky and started making money off the bat.

 

 

Luke recommended some demo platforms in a different thread. You should look into it and paper trade. Although I am not a fan of paper trading because it completely takes away the emotional side of trading, it is necessary. Don't get too used to it though... live trading is nothing like paper trading.

 

Out of all the professional traders I know, I have yet to meet a trader who did not blow out his account at least one time. I have a friend who is an excellent NYSE stock trader who made money consistenyl from his first year. But even he lost his initial stake of $15k.

[carter 10]

Is intuition even necessary? What about system traders who follow signals. Intuiton has nothing to do with their performance. Any comments?

[Stockaddict 10]

Is intuition even necessary? What about system traders who follow signals. Intuiton has nothing to do with their performance. Any comments?

 

Are you saying that system traders blindly follow their signals without overall understanding of the market?

 

Wouldn't intuition help even with system based trading since they would be able to obvious false signals?

[carter 10]

Are you saying that system traders blindly follow their signals without overall understanding of the market?

 

Wouldn't intuition help even with system based trading since they would be able to obvious false signals?

 

That is how traders lose. If you are trading a system, you need to take every signal in order for the system to work.

 

By not following your system 100% you decrease your odds of profitability.

[Soultrader 12]

I see where you are getting at carter. I have never traded a system or have any experience with it so it would be hard for me to say whether intuition is necessary for pure mechanical traders.

 

It's hard for me to follow how system traders think in terms of market understanding since I have focused hard to be a pure discretionary trader.

[Blaze 10]

None ... If you treat it as you do any formal education for a good paying profession. $2-300 per month US will pay for a real-time datafeed, good charting and simulator. Once you can make money on the simulator consistently for at least 3-6 months, you've garduated and the return on your investment will be quicker than virtually any other profession.

 

If this is a 2 year process, it's still a cheap and quick education considering it's potential.

 

Now if you prefer the quick route that most use, you will blow in direct prportion to what you start with. And you will most likely blow out a few times over before you come to the decision that one cannot make money at this, or you decide to get the education and a few (very few, and most were during the 90's boom) have even got lucky and started making money off the bat.

 

Do you mind if I ask how long it took you to trade successfully? If a trader spends 2-3 years and can not seem to be profitable, would you recommend him to stop trading?

 

I am curious to know if trading can be learned or is it talent. If it is something that I can be good at through time and hard work I am willing to go all the way. However, if talent is a big factor in trading I may need to reconsider this field. I read that the failure rate is incredibly high. Why is this?