We often can see many traders using the same trading system? Surprisingly some of them are making profit while others are losing money? What is the secret? It is the intuition of successful traders helps them to make right decisions.Therefore the subject of this article is intuition in tradign currencies.
Success in any area of human life has a lot to do with intuition. Let’s define the intuition for Forex trader. Intuition in trading is the decision making ability that goes beyond the rational thinking. Each trader trades with his own risk level. That can be attributed to intuition. Another question is, can you learn currency trading and develop your intuition?
Indeed this choice is based on trial and error or intuition. There is no formula to give the exact answer which risk level will suit you as a trader. Every trader takes certain risk and only inner voice can give him a hint on what will be the right level.
This is just an example. The role of intuition does not end on choosing a risk level. Trader uses his intuition quite often. It’s impossible to estimate with mathematical accuracy all the parameters in the Forex market. You can not take into consideration every internal and external parameter that is involved in the process of making decision.
Therefore trader must make a subjective decision. It is in that subjectivity intuition is contained. Therefore we can give another definition for intuition – it is the way of perceiving and processing the information from environment which is invisible for our conscious mind..
Such decision however is based not only on irrational intuition but also on trader’s knowledge and experience. That does not mean however that a trader needs large amount of knowledge about the market. All that is required is to focus attention on the most important aspects of the market.
It is the intuition that has that power to direct your focus towards the more important information. It is almost like an instinct of perceiving the right information. However it develops with the experience.
With the experience trader develops so called feel of market. He feels the momentum of the price movement. If he senses any kind of change in momentum, he will take action to protect his capital and make profit. That can be considered as an intuitive decision.
The losing of such “feel” of market can mean loss of the capital. Therefore for most successful traders that intuitive feel serves continuously. It goes almost subconsciously like breathing. He keeps analyzing the information but conscious mind does not notice it.
All people are familiar with the life situation when action must be based not on rational decision making process. Sometimes it is not possible because of information overload or lack of it. Therefore we take actions based on our “inner voice”. Very often those actions are the most successful ones.
Psychology tells us that a trader can see the entire situation in as a whole complex unity. The question remains: can one develop such intuitive abilities or is it a personal trait that is really hard to change? In my opinion we all have it however our continuous effort can develop it much more.
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