"so, you place ~100 trades each day based on gut feeling alone. no disrespect, but somehow i doubt that" I never understood why traders who trade a system method, ( often unsuccessfully) will doubt someone who trades sucessfully based on their gut feeling. It seems to me most systems are based on TA and rely on the equity repeating past behavior. Why would that be inheremtly superior to someone observing the direction of the market and making an intelligent decision based on what they see happening?
Yes this is called market feel. You can systematize it to an extent by analysing your trades and looking at what signals led you to get the feel, but it's hard to quantify it entirely.
Same here... for the most part. Using charts = chart tools to measure price action for probable upside or downside bias next, but the pace and flow of tape is important. Low vol pop & chop that just meanders around clouds the overall picture. Normal to high volume and volatility conditions make "reading the tape" much easier. Everything works better then... chart patterns and price movement become crisp and clear predictable. This is not a gift or art: it is a learned skill-set from time spent watching live charts thru all market conditions. There is no possible way to teach reading the tape = flow... it is something that can only be learned from eyes to brain.
I agree. I would time myself on stocks I was unfamiliar with. Allocate 3 minutes to determine what's next. Then 2 minutes. Then 1 minute. Condensing signals. Practice. In the end you should find out at least what you can and can't do in a certain amount of time.
The few profitable traders that trade via intuition usually have a lot of trading years and market experience with a particular trading instrument. Simply, intuition trading is not recommended for beginners to trading or for traders new to a particular trading instrument. Also, all the intuition traders I've met actually do have some rules they follow although the rules are fairly simple to follow. Thus, I've never met an intuition trader that has no rules what so ever. Therefore, whats clear (strategy) to them may seem unimportant or not clear to us. Mark
Absolutely. This is exactly what "gut feel" is. The more screen time you get, the more internalized patterns and crowd reactions to them become. My first 3 months day trading I used a couple strategies I learned based on candlestick patterns. Although I had many fantastic trades and made excellent profits at first, I had very poor risk management and began losing by trying to make bigger profits too fast. By the 4th month I'd added a few more strategies based on TA, threw in some slightly better risk management and had a couple small profitable months. This year the months of screen time started to pay off. I still looked at TA for strong setup signals (especially S/R levels and trend lines), but had learned to "read" the L2/time & sales action to validate the signals. I was doing this based on "gut feel". In my journal I would note "the L2 action got 'that look' and I decided to exit the trade". I met a prop trader who lived and died by the L2 action and we had a long conversation about it. It turned out that what I was experiencing as "that look" (gut feel) was actually various patterns in the tape that I'd internalized from hours and hours of screen time. So even though back then I couldn't put a name to it ("refresher, short signal invalidated, consider long"), I was still using it, eye-to-brain, having seen what happens again and again. One of my biggest hurdles yet to overcome is trusting my gut feeling despite what my rational TA-based mind thinks. I still fight with myself. For example, I'll see a chart get a "look" that has breakout written all over it, yet won't put on a long position because it's trading at 52-week highs.
Trading since 1978.... I would computerize what I do.... If I could.... Maybe it can be done....I doubt it.... I have computerized a lot of it.... But not all of it....
I like it... I pay 300 a month for the Trade the News service (200 for squawk and 100 for equity news) so it is kind of expensive. It won't make you profitable alone, but it provides me with more comfort. I don't have to stare at the screen to see where the futures are going. Plus I can gauge momentum and whether paper or the locals are buying/selling. It also makes it more easier to predict whether tops/bottoms will be broken or whether the fade at support/resistance.
Interesting, I try not to let my gut feeling ever get in the way of what the charts are telling me. I actually make an effort to keep it that way. After many years I accepted that I cannot predict the market but I can react to unusual events that spell doom for one clear side, and that's where I make my money. Lot of patience required from my part.