Trading from Your Gut: How to Use Right Brain Instinct & Left Brain Smarts to Become a Master Trader
- Intuition
- Using Gut Instinct: Left Brain Versus Right Brain
- The Artificial Brain: Neural Networks
- Thinking Versus Feeling: Can't We All Just Get Along?
- The Two Trading Camps
- Whole-Brain Trading
- Mastering the Art of the Trade
This chapter is from the book
This chapter is from the book
This chapter is from the book
Using Gut Instinct: Left Brain Versus Right Brain
Relatively recent advances in psychology and neuroscience show that human intuition can indeed serve as the basis for powerful rapid decision making. Our brains can make decisions using thousands of individual inputs almost instantaneously. This type of rapid parallel processing occurs in our right-brain hemisphere. Because of the speed of the right brain, it can be a powerful tool in the hands of an experienced trader. Unfortunately, too much reliance on an untrained gut can prove disastrous for the inexperienced trader. This makes proper training very important.
Analysis, linear thinking, ordering, and the need to find structure dominate left-brain thinking. We try to make sense of the world with our left brains and bring order to it. We categorize, theorize, rank, and file with our left brains. When you think out loud, you are using your left brain. Put another way, when you think consciously, you are using your left brain.
The right brain, in contrast, is concerned with the whole picture and the spatial relationships between each of its parts. The right brain is quick and intuits instead of reasons. If you've ever felt uncomfortable or unsafe but couldn't pin down the reason, this was your right brain's sense of intuition generating that feeling. The right brain excels at reading patterns and interpreting their meaning in the context of a larger picture, and it moves much more quickly than its counterpart.
This speed comes at a price. Although the right brain can quickly come to a conclusion or recognize danger, it cannot generally explain the reasons why it has arrived at that conclusion. This often puts it at odds with the left brain because that analytical part of the brain wants explanations for its decisions.
To better understand how the right brain works, it's worth looking at the processes embedded in neural networks.