1. Stock Traders’ vs. Stock Investors' Roles in the Marketplace
  2. Decision-Making Methods: Informed, Uninformed, Intuitive
  3. Informed Traders: Fundamental Traders, Technical Traders
  4. Swing Traders
  5. Buy and Hold Traders
  6. Value Traders
  7. Trend Traders
  8. KISS Traders
  9. Momentum Traders
  10. Range-bound Traders - Break-out Traders - Channel Traders
  11. Options Traders
  12. Options Seller Traders
  13. Day Traders
  14. Pattern Day Traders
  15. Intra-Day Traders
  16. Intra-Day Scalp Traders
  17. Introduction to Stock Trader Types
  18. Contrarian Traders
  19. Active and Passive Traders
  20. Futures Traders
  21. Forex Traders
  22. Online Stock Traders
  23. Pivot Traders
  24. News Traders
  25. Noise Traders
  26. Sentiment-Oriented Technical Traders
  27. Intuitive Traders
  28. Price Action Traders
  29. Price Traders
  30. Detrimental Traders
  31. Unsuccessful Types of Stock Traders
  32. Conclusion

While this category of investing is maybe not well recognized, many traders fit the pattern.

To understand what is meant by an intuitive trader it is important to first look at what intuition means.

Intuition in the context of decision-making is defined as a “non-sequential information-processing mode.” Therefore, intuitive decision-making can be described as the process by which information acquired through associated learning and stored in long-term memory is accessed unconsciously to form the basis of a judgment or decision. This information can be transferred through affect induced by exposure to available options, or through unconscious cognition. Intuition is based on the implicit knowledge available to the decision-maker.

In reality, the processes of sensing, feeling, coming from the heart or the gut, and other ways of describing what is going on are external representations of something very real to the intuitive trader.

These processes rely on an interesting combination of knowledge, information, and past market experience. When traders talk about the close link between these so-called subconscious thoughts and bodily feelings, they are generally referring to what is called "trading intuition."

Intuitive traders look at charts a bit, and even more into company fundamentals, but the biggest factor that remains is a general feeling, momentum not only in the individual stock but in the company itself. The trader may look at numbers and find specific opportunities but tends to develop a general feel for many of these companies they wish to invest in.

Intuitive trading gets a really bad rap and very little respect. Traders speak about it in hushed voices, almost like they don't want to be "found out" or accused - of trading with their feelings, rather than with a logical, considered and back-tested analysis.

Neurological research shows us that when people make decisions in situations where they have a great deal of experience, their explicit reasoning is preceded by a brain process that is not conscious to them.

"Buried within each and every one of us there is an instinctive, heart-felt awareness that provides - if we allow it to - the most reliable guide." - Charles, Prince of Wales

There is a lot of truth to this statement. On the other hand, people who claim to rely on intuition may also end up doing things that are not in their best interests or the interests of others.

Becoming an intuitive trader

Intuitive trading is the height of trading as an art form. Only traders with many years of successful trading experience should attempt to subjectively trade the markets. Trade markets using irrational emotion and little or no price action analysis, can leave an inexperienced intuitive trader in a losing position. There must be an objective reason for every market action. If there is none, then a subjective approach is being used to trade the markets.

Beginning traders will lose money over 95% of the time subjectively trading markets because their emotional responses have perceived price action irrationally. It is very, very easy to confuse intuition with into-wishing. A solid price-analysis based trading approach is the best for a beginning trader, which may even include the use of indicators and technical analysis.

Skillful intuitive traders know how to use their intuition to make quick, conclusive decisions. There are times when going with their “gut” instinct can be shrewdly accurate. There are also times when their intuition can be dead wrong and nothing more than wishful thinking. An experienced, profitable trader usually knows the difference.

Experienced intuitive traders frequently report trading in the zone, a time when intuition allows the skilled trader to quickly seize rare market opportunities, act decisively, and make a financial killing. It is important to remember, however, that beginning traders have only rudimentary intuitive skills. These skills are not yet fully developed. It takes time, experience, and practice to develop them.

Intuitions may not reflect facts. Any intuitive thought should be grounded in facts. In other words, if a seasoned intuitive trader were to think backwards after making an intuitive decision, he or she should be able to map out the information and signals that went into making the decision. All intuitive thoughts and hunches should reflect the processing of specific pieces of information. If they’re an inexperienced trader, it’s unlikely that an intuitive decision is based on such information, so rather than act on intuition decisively, it is vital that they stop and think backward.

Although experienced intuitive traders know how to act on their hunches, inexperienced traders are better off if they stay close to the facts. Over time, and with experience and practice in many situations, they’ll be able to trade intuitively, decisively, and profitably.

Price Action Traders

Related Articles
  1. Personal Finance

    Let Your Intuition Guide Your Investments

    Don't ignore that gut feeling - it might just be leading you in the right direction.
  2. Investing

    Intuit: An Activist Investment Analysis (INTU)

    Read about the unlikely and amicable alliance between activist fund Relational Investors and popular software provider Intuit.
  3. Investing

    Intuit Stock Trades Ex-Dividend Friday (INTU)

    Intuit will send its dividend payment on July 18 to shareholders of record as of July 12.
  4. Investing

    Intuit’s Lending Business Is Up And Running

    Though investors won't find reference to it in Intuit's (NASDAQ: INTU) earnings release, or hear anything about it from CEO Brad Smith, the QuickBooks Financing arrangement announced in September ...
  5. Investing

    Why Intuit Rose 3.58% Last Week (INTU)

    The company's divestments, once completed and fully adjusted into current operations, will likely fuel even better results going forward.
  6. Investing

    Intuit Stock Rises Ahead of Q3 Earnings (INTU)

    Wall Street expects the financial software company to deliver year-over-year increases in both earnings per share and revenue.
  7. Investing

    Intuit Raises Its Guidance for Fiscal 2016

    Buoyed by a strong third quarter, maker of Turbo Tax, QuickBooks and other financial software products Intuit (NASDAQ: INTU) lifted its projections for annual revenue and net profit. For the ...
  8. Investing

    How Intuit's Transition to the Cloud Has Driven Revenue Growth (INTU)

    Learn how Intuit is transitioning its users to the cloud, and how the company's revenue growth is being affected in the short and long terms.
  9. Trading

    Does Your Personality Match Your Trading Methods?

    Investing has ways to successfully accommodate a variety of personalities. Learn how to align your trading with your traits.
  10. Investing

    Black Swan Events And Investment

    These world-changing events are rare and difficult to predict, but they have serious implications for your investments.
Trading Center