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Trading Intuition

I’ve heard from many traders that they often take decisions based on instincts. Actually, all non-quants use intuition in some form or another. If you are not using a program that takes all signals that your system produces, how do you decide between several equally good looking trading setups with similar risk to reward? Do you take them all or do you concentrate on only a few? The odds are that you are doing the latter and your ultimate choice for capital allocation is subconscious.

Even though we are defined by our decisions, we are often completely unaware of what’s happening inside our heads during the decision-making process.
Feelings are often an accurate shortcut, a concise expression of decades’ worth of experience.
The process of thinking requires feeling, for feelings are what let us understand all the information that we can’t directly comprehend. Reason without emotion is impotent. (more…)

Quotes from "Trading for a Living" by Alexander Elder and my love for trading

“The market does not know you exist. You can do nothing to influence it. You can only control your behavior.”
“The ocean does not care about your welfare, but it has no wish to hurt you either. You may feel joy on a sunny day, when a gentle wind pushes your sailboat where you want it to go. You may feel panic on a stormy day when the ocean pushes your boat toward the rocks. Your feelings about the ocean exist only in your mind.” 


“A sailor cannot control the ocean, but he can control himself. He studies currents and weather patterns. He learns safe sailing techniques and gains experience. He knows when to sail and when to stay in the harbor.”
“When joy sweeps you off your feet, you will make irrational trades and lose. When fear grips you, you’ll miss profitable trades. A professional trader uses his head and stays calm. Only amateurs become excited or depressed because of their trades.”
I still need to control my emotions, thus I am still an amateur trader. No matter how much I try to pretend to myself to not get excited or fearful, its impossible. You just cant lie to yourself… This is the one other skill I need to work on psychology wise. 
On a side note I would like to share with you what attracts me about trading (more…)