Trading on intuition can resemble gambling
With screen time your ability to get a "feel" for the markets improves to the point where you can have periods (as other traders will attest to) of recognising when or where changes in sentiment are likely to occur. Also known as "being in-sync" with the markets.
The problem with intuitive trading is when trades are taken which don't comply with the trader's edge. This includes the predefined risk on the trade. If trading outside the criteria that essentially provides the edge to consistent profits, then the trader is in effect, gambling.
The point of "chart reading" is not to gain an elusive insight into predicting when the market is going to move either up or down. Rather, charts purely provide a template of price levels which you can use to define a risk, entry and ideal target area which produce bets with payouts greater than the risk based on a statistical edge. Each individual trade outcome is unknown....the expectation is that by sticking to your edge, over a large sample of trades, you will be profitable.
My trades in the SPI yesterday illustrate the points above. The second trade was a "feel" trade, where I sensed a reversal. Now this reversal was only very brief and fortunately I was nimble enough to manage exiting before the trend quickly changed once again. However, what you will notice is the heat I took was greater on this trade than any of the other trades. That's because the other trades incorporated price levels to determine a lower risk level. On the contrary, the "feel" trade actually was void of any tight risk level. And given I was trading counter trend to the primary bias, it stands to reason the importance of a tight, predetermined risk level.
click on chart to enlarge
On a side note, in the post Retail Offense, Professional Defense, I noted how I joined the retail traders in my first trade. The first session above was almost identical circumstances however I traded the other side this time.
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