Intuition and Trading

Many years ago in Chicago, some psychology grad students filmed the famous therapist Carl Rogers with some of his patients.  They were trying to understand the 100 year old problem of why some patients get better and others don’t.  What is the difference between them?

They analysed many hours of film and studied the clients that got bette and those that didn’t.  Clients is what Rogers called the people that consulted him.  Finally they figured it out.  The clients that solved their problems behaved in a very particular way when they were asked an important question, or were discussing a deep issue.

They didn’t answer right away, they paused.   They weren’t just thinking about the answer, they were waiting for the answer to come to them.  Eugene Gendlin, one of the investigators, sytematized the process as focusing.

George Soros would get severe backaches when his portfolio was out of whack. That would be his signal to find out what was wrong with his positions and change them. Brett Steenbarger writes about allowing the trader’s intuition to surface by meditating, relaxation techniques, or biofeedback.

I find that it takes me about half an hour to sit in the morning, before the market opens, and let my mind settle. One great benefit of that is that issues that I had been thinking about often resolve or at least become clearer. I am calmer throughout the day. If I don’t do it in the morning, I feel a little off kilter all day long.

It is especially useful when trades are going wrong. There are many emotions that swirl around in my stomach when a trade goes badly. The solar plexus is a huge complex of millions of nerves, it is responding to the world all the time too, and seems to be part of the feeling brain. Deep breathing helps to calm the mind and body so that I can think more clearly.