I have noticed a couple of times that you have mentioned intuition or acting intuitively on this thread.
I think this is a powerful, if elusive, ability to have. I take it as somewhat like seeing/knowing what to do without consciously thinking, although it may be hard to put a description into words for it.
There were comments recently on another thread about over-thinking, and about acting without thinking, and I thought about your posts together with them, as relating to the same thing, beginning here:
Of course, this sort of "acting without thinking" is the opposite of reactive, impulsive "unthinking" action that just gets you into trouble by doing something foolish. It's the difference between being in the groove and not having a clue.... Or, perhaps, having a higher level of awareness vs. a lowered level, where you may think you are at the high end, but really are not.
I do not know how to cultivate or develop this ability, other than practice, and I do not know what aspects of practice or experience help with it. I do not know if you can consciously develop it, although I would like to.... it seems to come and go in flashes, and to be difficult to pin down.
Anyway, if you have any thoughts or experience on improving this ability, and would be willing to share them, I would be grateful.
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My personal belief is that the critical component to the way the subconcious makes its decisions is what habits and belief system we developed.
If you start out at trading you have all the natural habits and beliefs ie. success through active work, being right, fear of losing, adverse risk behaviour (let losses run & cut losers). If in that phase of trading development, our subconcious will use these exact habits to reason its decisionmaking. Which will lead to adding to losses etc. etc. - even if we already know its bull** to do that.
When however you truly mastered the concious process of trading and made it a habit to be consistent with stops and targets, preserving capital and aiming for the process with focus on the larger averages so that making the right decisions in a trading situation becomes somewhat natural to you ie. you don't even think about adding to a red position or widen the stop - then and only THEN you can slowly start to trust you stomach and let it guide you through your impressions.
What I would then want to do though is keeping a seperat journal/record about when did I act intuitively and what was my feeling, the result and the action in relation to my concious trading rules. Be open yet critic about it.
Again, that's just my humble model of how I imagine the world
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Yes, I can agree with that: how our mental habits need to be different, when trading compared to other pursuits. This is a matter of habits, internalizing rules, having the right experiences and learning from them, and I think it's very important. Trading is its own skill, and that skill needs to be developed.
What @iqgod was referring to, I think, was an intuitive recognition at the time that the trade he was in would not continue to work, and he got out just based on that feeling. If that's a matter of skill and habit, or a development of it, it's operating at a very high level. Or, it may be something that comes to one when one is sufficiently skilled, but is in fact something different.
Anyway, I think developing that intuition is important, and I am very interested in @iqgod's (and anyone else's) take on it. (Don't want to highjack the thread, though.... sorry to go on about my beliefs.... )
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It is just practice practice practice till you internalize the validated beliefs that YOU have formed based on your experiences with the market - just put in the screen time and you automatically get there.
Read the Mental Game of Poker by Jared Tendler for how to get started.
Gerd Gigerenzer uses the term 'unconscious intelligence'. I also think of it as heuristics (good rules of thumb) and 'feel', I think we all know roughly what we mean by it, and it's what the experts in most fields do without being aware of it. My two latest best reads are his books 'Gut Feelings' and 'Risk Savvy' (there are financial chapters but neither is directly trading related.) Now if only I could remember where to find it and what to do with it...
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