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The Truth About Intuition And How Discretionary Traders Can Improve It

The Truth About Intuition And How Discretionary Traders Can Improve It

A few years ago, I read a fascinating article about U.S soldiers who had been on multiple deployments to Iraq. What was special about those soldiers is that they got to a point where they could predict with amazing accuracy whether or not there was a bomb on the streets waiting to explode.

And even more amazing, when asked how they could do it, they were speechless – they couldn’t explain it.

“It felt cold…”,


“It felt wrong…”

… those were the best explanations they could provide.

This is not unique to U.S soldiers. Such cases are all around us…

Consider a mother who can look at her child and, in an instant, know that they are hiding something from her. She might not know exactly what it is but she definitely senses something. And then, sure enough, later she discovers what has been going on.

This ‘superhuman’ ability to predict things with sometimes incredible accuracy is commonly referred to as intuition. But in truth, intuition is not as mysterious as one might be inclined to think.

It turns out that the unconscious part of our mind can process an enormous amount of information. Far more than we had ever imagined.

For instance, as you’re reading this post, you have probably made countless unconscious observations around you. A part of your mind is constantly on the lookout for danger, so it’s paying attention to the environment around you. It’s sensing the chair you’re on, the people around you, the unusual sounds in the room… and most of the time, this happens below conscious awareness.

Meanwhile, the conscious part of your mind is there, focusing on this post and is captured by it, but, in an indirect way, you kinda know what is happening around you. Except that you don’t consciously know that you know.

The unconscious part of the mind is really good at detecting subtler patterns (things that it cognizes to mean something) that often go unnoticed by the conscious mind.

Here’s an example.

You enter your house after a long day at work, but you feel something is off. You don’t know what; you can’t pinpoint it, but you can feel it. So you decide to call the police. Fair enough, a cold-blooded killer who has recently escaped from prison is hiding in your bedroom upstairs.

Your unconscious mind knew some things that your conscious mind didn’t. It picked up small details — a small patch of your grass outside the house has been trampled over; the lights were on in the kitchen, and so on.

Intuition usually comes to the surface as an abstract ‘knowing’ of something, which is followed by some gut feelings of some sort. When that happens, it’s usually useful to pay attention.

Intuitions have a fair probability of turning out ‘correct’ if one pays attention, cultivates a clear and open mind and knows how to read the signs.

How to improve your intuition?

As a trader, here are five simple steps you can take to improve your intuition…

1. Trade small.

I cannot stress this enough. If your risk exposure is too big, your decisions will be driven by fear rather intuitive experience, or the rules set forth in your trading plan.

2. Screen time.

You can call that deliberate practice. By staying engaged in the market — by deliberately practicing — you are allowing your unconscious mind to process the data coming in (the patterns in the markets and also in your own behavior) and to organize them in a way that allows you to better access them in the future. The more the screen time, the faster the progress!

3. Be bold.

You have to look for your opportunity but then execute boldly without overthinking. A decision, whether right or wrong, will result in a learning experience.

4. Journal.

Journal your trades and write down your observations about the market. Keep it simple, you don’t have to write a novel or an academic piece of work. Remember, it’s only about getting your mind to spot patterns so that the spotting later becomes efficient and second nature.

5. Learn to meditate.

Meditation has been instrumental for me. A quiet mind is able to hear intuition over fear.


If you’re a new trader, the worst thing that can ever happen is when you break your own rules because you think you have a hunch.

Newsbreak: You don’t! You need at least a couple hundred (if not thousand) hours to develop a reliable form of intuition. Something that’s fine-fined and accurate. This means that you’re not mistaking some random gut-churning sensation in the pit of your stomach for intuition. It takes time to develop this quality of wise-discernment.

So my advice if you’re a new trader: keep everything systematic and rule-based. At least the first few years. When you have a rule-based approach, you have a structure that guides your behavior. Which makes your results more consistent. And it also puts you in a better place to learn.

Only the traders with years of profitable rule-based trading experience get a free pass to deviate from their plan from time to time in order to follow their intuition. Work on developing that flair too.


Intuition is not some sort of esoteric and enigmatic quality that few possess. Inherently, the human mind has a pattern-seeking tendency, and intuition is simply an ability to spot subtler patterns and make reliable predictions off of that.

Anyone can develop that skill. Intuition is rooted in attention, mindfulness, and deliberate practice, which then leads to Mastery.

Mastery is effortlessness. You’re not fighting or trying hard. In some cases, you’re not even thinking. You’ve just allowing yourself to be, and by being, you’re letting intuitive experience come to the surface and guide you.

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I've been trading for a living since 2006. By merging mindfulness (an in-depth study of the mind and its tendencies in the present moment), a good trading process, and an efficient business practice, I went from being a losing trader to a consistently profitable one. Through my work here at Trading Composure, I aim at helping you do the same.
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