” In philosophy, intuition means a human ability to grasp essence of things as a result of instant subconscious insight, not by logical thinking. ”
Speaking about trading, it is an ability to work and feel the market in the heart, but not in one’s mind. George Soros, a legendary investor of our century, combines wisely his intuition with technical and fundamental analysis. If his theory is confirmed, he expands his intervention following a market trend.
” Filling in the table of reasons for traders’ behavior, you should ask yourself why you decided to open/close a particular position. ”
If you cannot find logical reasons and explain your decision, you belong to the type of instinctive or intuitive traders. This trader always takes into account obvious reasons, previous experience, and market behavior. An instinctive trader cannot tell anything definite at all except that he was appealing to his vision. On the contrary, if a decision is sensible and logical, it is an intellectual type of traders. At first glance, an intellectual trader is likely to succeed. However, the sober judgement reflects fears about uncertainty and success of a deal.
After you fill in the two tables, you will be able to assess your psychological type. Make sure you get to know recommendations on each one.
Instinctive/ Active (aggressive)
Weak points: over-emotional, sensitive to fears, hope etc.
Strong points: stamina
Recommendations: calm down and not make hasty decisions.
Instinctive / Passive
Weak points: subdued emotions, stubborn, reserved
Strong points: common sense.
Recommendations: relax more frequently, close deals with determination
Intuitive / Active (aggressive)
Weak points: nervous breakdowns, lack of regular self-control
Strong points: adequate understanding of a current situation, ability to make decisions under uncertain conditions
Recommendations: nonstop self-control, impartial attitude to everything
Intuitive / Passive
Weak points: desperate after failure, accumulates negative energy, reflection
Strong points: risk-aversion
Recommendations: active leisure, make more deals, discuss your activities with other traders, but make decisions on your own
Intellectual / Active (aggressive)
Weak points: gets tired soon, needs long rest, overreacts to fundamental data
Strong points: capable of taking fast sensible decisions, self-analysis
Recommendations: develop stamina, take a break as soon as attention eases
Intellectual / Passive
Weak points: slow-thinking, stubborn, fearful, lack of self-confidence
Strong points: double checks to be sure, persistent to reach a goal
Recommendations: calm down and make prompt decisions, be suspicious of recommendations from others
To sum up our discussion on psychoanalysis, it is hardly possible to change an adult. However, an adult is rather capable of fostering the necessary qualities to work in the market. Therefore, psychoanalysis of a trader aims to detect psychological faults, which could cause financial failures, and to correct them. If a trader is defiant to correct negative traits, it would be better to acknowledge that trading in financial markets is not his field of activities.