Intuition to Intentional Action

[Tradewinds 12]

Today I came to the realization that I'd intuitively been trading a certain way, but could not define or explain it. This state was very frustrating to me. I could trade well, and immediately afterwards have absolutely no idea why I did well, and couldn't explain it to you if my life depended on it. That state does not give me confidence. I am an intuitive person, but I also have a hard time trusting what I don't consciously understand. Especially if it comes to a situation where there is substantial risk involved, like trading.

 

I realized that when I watch the price for exit cues, I do very well. But I didn't realize what I was doing. Basically I'm reading the price for exits, and using my indicators to determine what the trend is doing. I base entries on my indicators and use my indicators to anticipate what the trend is doing, but I base my exits on pure price action.

 

Then I realized that my indicators sometimes lag the price ladder. So price can take off, and my indicators don't show any reason for the price taking off. That doesn't happen all the time, but it happens often enough to make a significant difference in my decision making.

 

So there are times when I need to give price the priority, and times when I need to give my indicators, and my trend analysis the priority.

 

Again, I've realized that when I read pure price action for the exits, my trading is significantly better. I attribute it to some intuitive feel for when price is about to hit its' major profit potential. Now I want to consciously define what I'm intuitively sensing.

 

I've categorized some phases that seem to be part of the process of going from intuition to intentional action:

 

 

• Enter into a certain state of mind (The "Zone")
  
• Intuition
  
• Discovery - Subconscious
  
• Realization
  
• Definition
  
• Conscious Intentional Action
  

 

Some people may have no desire to go from intuition to the conscious realization of what they are intuitively doing. (E.g. Belief that traders are just "born". Can't be trained) So the journey would end there. I want to get to a disciplined and intentional conscious action.

 

What are your thoughts on the subject?

[MightyMouse 12]

Today I came to the realization that I'd intuitively been trading a certain way, but could not define or explain it. This state was very frustrating to me. I could trade well, and immediately afterwards have absolutely no idea why I did well, and couldn't explain it to you if my life depended on it. That state does not give me confidence. I am an intuitive person, but I also have a hard time trusting what I don't consciously understand. Especially if it comes to a situation where there is substantial risk involved, like trading.

 

I realized that when I watch the price for exit cues, I do very well. But I didn't realize what I was doing. Basically I'm reading the price for exits, and using my indicators to determine what the trend is doing. I base entries on my indicators and use my indicators to anticipate what the trend is doing, but I base my exits on pure price action.

 

Then I realized that my indicators sometimes lag the price ladder. So price can take off, and my indicators don't show any reason for the price taking off. That doesn't happen all the time, but it happens often enough to make a significant difference in my decision making.

 

So there are times when I need to give price the priority, and times when I need to give my indicators, and my trend analysis the priority.

 

Again, I've realized that when I read pure price action for the exits, my trading is significantly better. I attribute it to some intuitive feel for when price is about to hit its' major profit potential. Now I want to consciously define what I'm intuitively sensing.

 

I've categorized some phases that seem to be part of the process of going from intuition to intentional action:

 

 

• Enter into a certain state of mind (The "Zone")
  
• Intuition
  
• Discovery - Subconscious
  
• Realization
  
• Definition
  
• Conscious Intentional Action
  

 

Some people may have no desire to go from intuition to the conscious realization of what they are intuitively doing. (E.g. Belief that traders are just "born". Can't be trained) So the journey would end there. I want to get to a disciplined and intentional conscious action.

 

What are your thoughts on the subject?

 

Can I guess that your period of intuitive realization involved great entries or great exits?

 

Such spells of "intuition" lead to great trading streaks since the phenomenon helps you build confidence in yourself. Such periods also lead to over trading and giving it all back and leaving you with the realization that the period of intuition was really just a good and welcome run of luck.

[Tradewinds 12]

Such periods also lead to over trading and giving it all back and leaving you with the realization that the period of intuition was really just a good and welcome run of luck.

 

Definitely. You are right. That's why we need to take it to the next step and consciously understand what we were doing right. Otherwise we can degrade and regress, or like you said, it may have been just a streak of luck.

[sweet n´sour 10]

Perhaps it is not so much intuition, but that different methods for entries and exits are the key to successful trading.

 

For example: an exhaustion candle (with big volume after a climatic uptrend etc.) could be a very good price action sign to get out of a trade very near the top.

 

On the other hand it is not necessarily a good price action sign to go short, because before the trend reverses prices could go a little bit higher still, and / or consolidate for a long time.

 

So for an exit of a profitable trade this would be very good, but for starting a new one it could stop you out, whipsaw you or need a very big SL leaving you with poor risk/reward ratios.

 

Using more lagging information (indicators... etc) for entries into a reliable new trend makes perfect sense to me.

[joshdance 10]

I attribute it to some intuitive feel for when price is about to hit its' major profit potential. Now I want to consciously define what I'm intuitively sensing.

 

What are your thoughts on the subject?

 

I think you are going about things in exactly the opposite direction as you should be. Try to cultivate your intuition. This may fly in the face of the vendors who want to sell you a "system" that can be traded by anyone, but ask any long-term successful trader to write a series of steps that a new trader can follow (like, specifics, not generalities like "cut your losses short") to achieve repeatable success, and it's obvious that it can't be done. Ask Paul Tudor Jones or some other successful trader how they do what they do, and I guarantee you they will not have a series of specific steps you can follow, otherwise they would just duplicate themselves and retire. Or, if they did write steps, following them to the letter would NOT produce the same results. Intuition based on experience in any field is what separates the really successful from the mediocre.

[Tradewinds 12]

I think you are going about things in exactly the opposite direction as you should be. Try to cultivate your intuition. This may fly in the face of the vendors who want to sell you a "system" that can be traded by anyone, but ask any long-term successful trader to write a series of steps that a new trader can follow (like, specifics, not generalities like "cut your losses short") to achieve repeatable success, and it's obvious that it can't be done. Ask Paul Tudor Jones or some other successful trader how they do what they do, and I guarantee you they will not have a series of specific steps you can follow, otherwise they would just duplicate themselves and retire. Or, if they did write steps, following them to the letter would NOT produce the same results. Intuition based on experience in any field is what separates the really successful from the mediocre.

 

Yes, you are right. Intuition is extremely important, especially with the type of trading that I'm focused on, which is scalping. I don't have time to analyze 100% of the inputs, every split second, and think about what to do. I'm making split second decisions on the exits. There is no time for much more that an intuitive feel for what the price action is doing.

 

You bring up a great point about traders duplicating themselves. Maybe that's one aspect of people trying to automate their trading, or the name "bots" (robots).