Intuitive Trading - Advantages and RisksFriday, 7 July 2017 13:09
Apparently, a lot of traders heard about such a concept as intuitive trading. This term describes the trading style, which involves making the transactions, based only on subjective experiences, premonitions, and assumptions.
Intuitive trading is used widely in the Forex market. Usually, such an approach is applied either by beginners of the financial market or advanced traders.
For the first ones, the trading process seems to be something like gambling. Beginners often make deals, guided only by personal emotions, in the hope of luck, which would bring them profit. Obviously, the consequences of such a trade are deplorable. Such a trader loses his deposit quickly. Then he either completely disappoints in Forex or understands that you need to have knowledge and skills for the successful trading.
As for the experienced traders, they usually use the intuitive trading naturally. Having a vast experience, a market participant no longer needs to check the indicators every second. Thanks to perfectly advanced skills, he can make the decisions without thinking about the details of the process. Thus, such traders receive a profit.
Advantages and Disadvantages
Given the difference in the experience of a beginner and the advanced trader, this method affects their profit level in different ways.
Thus, an experienced trader can feel all the advantages of the intuitive trading:
- Ability to be not distracted by the minor technical factors;
- Flexible application of all the skills, and their development;
- Being free from the strict rules of a particular strategy.
Scalpers often use such an approach. It’s also used by traders of the ultra-short-term transactions, whose profits directly depend on the speed of trading. The scalper doesn’t have enough time for a deep analysis of the conditions and checking all the pros and cons. While he makes a decision, a situation can change many times.
As for the beginners, as a rule, all the shortcomings of such an approach affect their balance. There are several main ones among them:
- Wrong forecasts, not supported by facts;
- Lack of the risk management;
- Impossibility of planning the profit;
- Irrelevant, emotional decisions;
- Lack of knowledge about the market and the principles of its operation.
Such a list can be extended, based on the negative experience of each particular trader.
So, is it worth being guided by the intuition, trading on the foreign exchange market? Everyone should answer this question on his own.
Let the results of your trade speak for you - this is the only real indicator of your tactics. If you trade for the first time, don’t rely on luck. It’s better to spend the time studying strategies and technical tools than to lose your money due to an irrational solution. If you have enough experience - most likely, you are often guided by intuition.
Don’t forget that the right strategy and right technical tools allow you to reduce risks many times, as well as to increase the profits. However, it should also be noted that the foreign exchange market can never be predicted with a 100% probability. Sometimes, the success of your transactions depends only on luck.
- Previous article: Mirror Pairs in Forex
- Next article: How Inflation and Deflation Affect the Currency Quotes