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.
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.
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 one tiny example of utilizing the intuition. It doesn't end on choosing the risk level for your trades. Market very often gives out contradictory information, which not always possible to process rationally. It's very hard to keep in mind every parameter of changing currency market.
When trader makes a decision there is a lot of subjective component in that decision. We can call that subjective component as intuition. In other words any decision based on the information from the environment that is not registered in conscious mind is an intuitive component.
Such decision however is based not only on irrational intuition but also on traders 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.
Intuition is a powerful force that makes clear what deserves your attention, time and effort and what doesn't deserve your attention. Intuitive abilities of the trader can be described as an instinctive perception of information from environment.
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.
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.
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.
Another definition of trader's intuition is his ability to see the market environment as one interrelated organism. Can one develop such ability or is it something one should be born with. In my opinion we are all born with such ability but trial and error and applying consistent effort will develop that ability.
