With all of the many different kinds of analysis methods out there, you would think that intuition has very little to do with it. But the reality that all successful traders and investors know is that intuition is what sets the winners and the losers.
That inner sense that is often very difficult to accurately express is what brings all of the plethora of information and analysis into a coherent, clear picture from which to make decisions. The trader’s ‘sense’ is what gives him the ability to absorb and process enormous amounts of information, data and variables to put it together into one common operating picture. There’s a clarity of thought that successful traders and investors have that is hard to teach or express.
I often hear Warren Buffett talk about his investment strategies. He finds a company, does a valuation on it, then looks to see if the market is undervaluing it. It’s such a simple process, but why can he do it so seemingly easily and smoothly while so many try to follow in his foot steps to no avail. It’s simple. He has an intuition that guides his analysis, and it’s something that is very difficult to transfer to others.
The same is true with successful traders, whether they work on the floor of an exchange, they trade from the office towers of their firm on Wall Street, or they day trade in their home offices. They all have an intuitive sense that most people can’t learn from just hearing them talk about it. It’s something that is innate. The good news is that most everyone can develop this intuition. But what it takes is going back to fundamentals and digesting them in a way that it becomes a part of you. And then each additional piece of learning on top of that must be processed in a way that is clearly understood. It can be done.
Most people just want a formula or a 5 step method to successful investing. They don’t care about understanding how or why the formula works. They just want to be robots. Surely that will bring them to ultimate failure in the markets. Again, go back to the basics and make sure you understand them. If you are in fundamental analysis, then learn each analysis ratio or piece of data and find out why that is important. If it is technical analysis you use, make sure you understand why certain metrics work or don’t work. Find out in what context they are successful and how to utilize them for your benefit. The best investing advice I can give you is to keep it clear and keep it simple. Then you can control the situation and trade from your gut as much as from your mind, whether you are forex investing, putting your money into stocks and shares, or investing in any other financial instrument.
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