Intuitive Trading: Pros and Cons

Today in the world there are a huge number of people positioning themselves as traders. How can all these merchants be classified?

Let us take a look at this community in terms of the trading system itself. Based on this approach, two large groups can be distinguished.

The first is technical traders. Their trading is characterized by a tough algorithm. The presence or absence of a trading opportunity, according to criteria that do not allow a double interpretation if so, then the definition of market, stop, take-profit points, according to the equally stringent requirements prescribed in each trading system.

The second is intuitive traders. We will talk about them in more detail. This trading method is based on patterns of market behavior that cannot be described as a mathematical formula, even a very complex one.

Such traders are more creative in trading. They are forced to process a huge amount of information, often not directly related to financial markets. They can open and close trading positions by making decisions sometimes spontaneously, but this is only the first impression. Just at the moment preceding the keystroke with an order to buy or sell, a complex puzzle is put together in their subconscious.

A review that was read yesterday and a combination of current indicators, a candle and a pattern that has just completed its formation, all came together when the news block came out and the price touched it at an important level. And as a result, the deal is open. All this took a split second but accumulated several hours, days, sometimes weeks. Exactly, closure may also occur. Without explicit confirmation which appears later, and simply indicates that the decision was the only right one. Everything written in no way speaks of trading with a coin toss. On the contrary, such trading is based on a powerful foundation of analytics and technology. But intuition, based on experience and many hours of monitoring the monitor with graphs of price changes, plays a very important role in it. Such trading from the side resembles the work of a magician. Two clicks of the smartphone’s keys over a cup of coffee, and you can send an order to withdraw profit. This is how the work of an intuitive trader sometimes looks from the side.

In the end, I would like to give a few textbook examples.

How George Soros collapsed the British pound, earning billions:
For six months, Soros bought up the British currency in small batches, so as not to arouse market suspicion. With the funds received, he bought 15 billion German marks at the current exchange rate of 2.8180 GBP / DEM. Due to a sharp change in the balance of supply and demand in the market, the pound has fallen.

The discount rate (the analogue of our key) in Britain was increased from 10 to 12% -15%, but the decline continued. When the rate was set at 2.509 GBP / DEM, Soros bought up depreciated pounds for all 15 billion marks. Demand for the pound increased and raised its exchange rate, on which Soros earned about one and a half billion dollars. The devaluation of the pound led to the devaluation of other European currencies and delayed the introduction of a single Euro currency for 5 years, plus, according to analysts, because of this, Britain did not enter the Euro zone.

He is called the thunder of the central banks and "the man who opened the Bank of England", he is associated with the global crisis in 1997-1998, he was enriched when in just 4 months the Japanese currency lost 1/5 of the value against the dollar.

The second example is Joseph Kennedy Moment.

On Monday, October 28, Joseph Patrick Kennedy, father of future President John F. Kennedy, sold all of his stock assets. It is believed that Old Joe, as colleagues called Kennedy Sr., so successfully left the game that the term Joseph Kennedy Moment even appeared in trading an unrealistically successful closing of bets. What made Kennedy do this? Market analysis? A press review or a poll?

Time Magazine gives a well-grounded version: “Old Joe succeeded in the Great Bull Market (Great Bull Market, that is, a grandiose collapse of the stock market in 1929 author's note) and survived the collapse perfectly, because he had a passion for facts, did not rely on feelings and I subtly felt timing (it’s quite difficult to translate the word timing in one word meaning “I knew when to enter the market and when to exit)”. Simple and clear: analyze the facts, don’t do away with emotions, carefully calculate the duration and dynamics of transactions these are the success factors. We have no reason not to trust Time, but for objectivity, one legend is worth mentioning, which is very unusual in interpreting the haste of Old Joe in the withdrawal of her assets from the markets.