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Johnathon

Trading Forex With Your Gut

By Johnathon, in Forex

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Johnathon    10

Johnathon
Posted

Trading With Your Gut

Quite often you will hear traders or trading coaches explain part of their trading as “trading from the gut” or “It was just a feeling I had about that trade”. What the trader or coach can never explain is “what trading from the gut is” or how and why they got a feeling about a particular trade.

As Price Action traders we spend a lot of time watching charts and perfecting our craft. Over the many months and years of watching charts our subconscious brain is picking up on all different kinds of information and locking it away. Generally we are not consciously aware that this analysis is going on, or that we are noticing these different patterns and scenarios.

 

The Subconscious Brain

The subconscious brain is picking up and storing information such as the outcomes of trades, what happened when price hit a certain level and the particular trades that did not work out. The subconscious brain is very powerful and can store incredible amounts information that our conscious brain cannot.

The problem with the subconscious brain is that it cannot remember the many different scenarios exactly or the particulars of trades gone by, over many years. Even though we cannot consciously remember exactly how price played out in the many trade examples of the past, the subconscious brain can give us warning signals. These warning signals come in the form of a feeling in the gut.

These feelings could be a worried and cautious feeling or a feeling of excitement and positivity. We may not be able to interpret why we are receiving these feelings but they are very real and are happening because of a reason. These feelings in the gut serve a purpose, and if listened too, and obeyed, can help you in your trading.

 

Listening to Your Gut

Over many years a well exercised trader will watch many Price Action setups come and go. Every time these setups occur the subconscious brain is taking notice. The subconscious brain stores this analysis away and keeps it for anytime the trader may need it. The next time a trader looks to get into a trade the subconscious brain will carry out its analysis and give the trader a feeling. The trader is often confused with this feeling and where it came from.

The subconscious brain is either trying to warn the trader that it has seen this scenario or pattern, and it didn’t work out well, or that in the past similar setups have worked out great. This feeling in the gut is always there for a reason, even though the trader may not be consciously aware of why they are experiencing that feeling. It is there to help the trader make a decision.

Novice traders will often get this feeling and deliberately ignore it and try to make it go away. The novice will feel puzzled and will enter the trade regardless, even if they are experiencing a feeling of caution.

 

Gaining Experience

Traders can learn to harness these feelings from the gut and use them to their advantage. The more experience and time a trader has had in front of the charts the better and stronger the feelings in the gut are going to be. This is because the subconscious brain has more analysis from which to draw upon. As the trader gains more and more experience they will also begin to notice which feelings they receive in certain situations.

Learning to listen and obey these feeling is vital to be the best trader you can be. When traders learn to trade using both the conscious and subconscious parts of their brain they will be able to feel and trade with the flow of the market. This experience is often referred to as “being in the zone”. Being in the zone is when a trader can logically select and manage their trades, and is also aware of their “feeling in the gut” and then acts accordingly.

 

The Human Touch

Computers in this day and age are incredible. Computers can work out the hardest of mathematical equations in seconds, which would take man hours to do manually. In trading with computers and in particular trading indicators have taken the retail trading market by storm, 4 out of 5 traders are either using indicators or looking for an indicator to use. As impressive as some of these indicators may seem they do not have that human element.

To become a master trader both the conscious and subconscious brain must be harnessed and accessed. Computers will never be able to replace the human touch that helps traders to feel when things are not quite right, or when something irregular may be about to occur.

 

I hope you have enjoyed this article and can use this information in your trading.

 

Safe trading,

 

Johnathon Fox

Forex School Online

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