Trading In Forex Market – And Intuition
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 to trade currencies and develop your intuition?
One trader can take higher risk than another one. There is no right or wrong answer to a question about the risk involved in each trading. If a trader makes profit consistently then he found his balance. Usually that balance is found through trial and error plus intuition.
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.
How you know what deserves you attention and what doesn’t. It’s the job of intuition to tell you which information you need to pay more attention and which is useless information.
For example a profitable trader feels he momentum of the price movement. If he notices a change of momentum and some shift on the price charts, he will react according to his knowledge and experience. That is basically intuitive decision.
If that trader loses that signal he can lose his investment. An intuitive ability of a successful trader serves him continuously. It happens on subconscious level, its like breathing for him. Even if he doesn’t realize it consciously the information is being processed intuitively on subconscious level.
Everyone had a situation in his life when he can rely only on “inner voice” or intuition. In our life it is not always possible to take actions based on rational decisions. This is due to lack of information or information overload. Many of our actions are based on seemingly irrational “inner voice”. However those actions usually turn out to be 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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