The Role of Intuition In Trading

[AbeSmith]

	Quote:	thetradingdoctor
	This is a very powerful and thoughtful post, Abe. The way the brain is constructed, there are two main pathways for processing decisions. One is rapid and emotional and is the limbic or rat brain. It is largely subsconscious and intuitive or instinctive. The other is the new brain--the cerebral cortex. This is analytic, non-emotional, logical and linear. The rat brain is a very fast processor and can completely take over the new brain-- especially in situations where one is bombarded with large amounts of conflicting information ( eg, during the trading day). Under these circumstances, the new brain "defaults" into the rat brain and the decision is made based on emotion. It is only later, perhaps in quiet, down time or in sleep when the new brain is has time to think about what the old brain has done without thinking. What do you think? Thanks! Doctor Janice

It's very interesting Dr. Janice. Thanks for your expertise.

[brownsfan019]

	Quote:	thetradingdoctor
	Then...there is that famous dart board. What about that? Statistically speaking, stocks are not serially correlated. That means there is an equal chance for the stock to go down as there is for it to go up. Where is the real skill in trading? What is the real skill in trading? Is it the implicit knowledge that comes from seeing patterns over and over again and acting on them? Are there trading savants? Why do some people just seem to "get it?" while others struggle for years and years? Thanks! Doctor Janice

Doc - in a theoretical sense, I agree that there really isn't anything to trading as the position has a 50/50 chance of working when you take the trade. The problem arises when that human emotion kicks in and/or if you let intuition take over in my opinion.

I'm sure there are some trading savants out there that we will never know of, but since this is such a rarity is why the rest of us look for those reliable, repeatable patterns that you mentioned. I think most traders do this simply b/c we know our intuition in and of itself is just not enough. From there, it's simply a matter of finding that 'edge' and exploiting it.

[thetradingdoctor]

	Quote:	brownsfan019
	Doc - in a theoretical sense, I agree that there really isn't anything to trading as the position has a 50/50 chance of working when you take the trade. The problem arises when that human emotion kicks in and/or if you let intuition take over in my opinion. I'm sure there are some trading savants out there that we will never know of, but since this is such a rarity is why the rest of us look for those reliable, repeatable patterns that you mentioned. I think most traders do this simply b/c we know our intuition in and of itself is just not enough. From there, it's simply a matter of finding that 'edge' and exploiting it.

Good points, here brownsfan. What do we do when we trade? We look for patterns that repeat. Our edge is in pattern recognition and the disciplined execution of the trade. I am coming to believe that a large part of what is called "trading intuition" is built into the brain syanptic strategy that underlies the fourth of five stages of mastery. That stage is called "unconscious competence." I will send an article to James that describes the stages of competence ( in case anyone needs a refresher or reminder). Thanks for this post brownsfan and please let me hear from others?
Thanks!

Doctor Janice

[walterw]

I am interested on that article... "unconcious competence"... certainly Janice if we did not had that, trading would be devastatingly stressfull... I like the autopilot concept and for shure it does not mean that we previously didnt need an "entrainment" founded on good solid technical arguments... thats why that instinct does not necesarily denies technical preparation, all of the contrary, I believe that instinct comes from your technical background... hope you understand me cheers The chimp...

[thetradingdoctor]

Ask and ye shall receive, Walter! Article: So You Think You Can Trade?
has been posted, thanks to James.

Doctor Janice

[walterw]

	Quote:	thetradingdoctor
	Ask and ye shall receive, Walter! Article: So You Think You Can Trade? has been posted, thanks to James. Doctor Janice

Once again, you are spoiling me Doc ¡¡

for your amusement some chimp stuff , enjoy

+ YouTube Video

+ YouTube Video

+ YouTube Video

cheers The chimp.