How to use intuition to predict the stock market

Being able to read another’s mind whether it is about figuring out if that girl likes you or whether it is to able to act correctly when it comes to taking trading decisions, to many intuition seems like a feat beyond one’s capacity. But what if I told you, that you already could? If you are an observant trader, You as who you are, can already read the stock market. As humans we are actually built to intuitively feel what another person is feeling. Having said that, why don’t we realise we have this capacity?

The reason is because we as cerebral beings overcomplicate it. In the times that we live in, there is a worldwide consensus to second guess ourselves, then second guess the second guess and then second guess even that while the opportunity slowly fades away which leaves us with regret of not having acted soon enough. We are pumped with the subtle standards that say, our feelings aren’t true because you need X for it to be true and you need Y and without it you cannot have Z etc. Overtime, due to a string of these thoughts, we end up distorting the truth. But the truth is simple, it is not as complicated we make it out to be. The truth is that human emotion is universal and we as societal creatures are built to feel and understand them.

Meditation helps intuition as it pulls your mind out of itself and pushes it into the present moment. When you stop judging, making assumptions and overthinking, your intuitive sense starts to pick up the environment through “feeling”. Since feelings are encoded into you by experience, reading emotions is not a difficult task if you can silence your mind from pulling you out of the presence.

But this is about reading the stock markets. How to do that? By applying the same logic to a crowd. Although it is difficult to encapsulate the exact mind-set of a crowd, you can get a pulse of it by observing certain crowd behaviour patterns. If you know your own emotions and the emotion of others, in-congruencies and congruencies can give you a rough understanding of what they are thinking. For example, you felt a stock was bearish on a particular day but the price had gone up and based on your observation of price action. You base a judgement that the stock is going to continue to be and the stock price will fall in the future. However, such conclusions need to have a larger context because fixating on a single day’s price action may not be the clear indication of the underlying situation. Reading into the character of the stock market is something that needs to be done overtime and not through assumption based on only one experience. This is difficult for many because they trade with a fixed mind-set to make money rather than to experience intuition through the flow of the stock market. The moment you stop trying to push what you have inside and actively choose to understand the emotional disposition of the stock market participants, you will be able to understand what they’re thinking. There are a wide variety of technical tools and indicators to predict the market manually without intuition but that method has inherent limitations. However, these tools can be used to sharpen your intuitive ability by constant observation and practice. You are built to pick up on it so long as you are immersed in the environment and not in yourself.

For example, when the market is clearly bullish and if you don’t overthink it and instead feel it in the present moment, you can feel spikes of emotion which will cause a surge in the stock market.

The mind is more complicated than the truth. The first step to getting things right is to “un-complicate.”

Tejas Khoday

Tejas Khoday

Tejas is the Co-Founder & CEO @ www.fyers.in, the youngest team to get NSE’s broker license. FYERS was started as a mission to enhance the terrain for traders and investors in India. He previously worked at Zerodha, Futures First & has been a professional trader for several years.

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Showing 21 comments
  • Sudheer Yelleti
    Reply

    Philosophy of stock markets 🙂

  • Akash Sinha
    Reply

    Very useful article. Good!

  • Pankaj
    Reply

    @Tejas Have you really written this all by yours ? 🙂 . If so you have done awesome job. Even otherwise its good read. Thanks for posting..

  • Satya
    Reply

    I really enjoyed reading it. Very good article 🙂

  • Ravi
    Reply

    Very true and very well written. Lot of depth in your posts.

  • Karthik_Gowda-Trader
    Reply

    Encouraging words…… I am a trainer. am learning from your writing skills.

  • Saurabh
    Reply

    Hi Tejas, I was your college mate but you didn’t know me but I had heard that you are a big trader. Today I came across your website while browsing for ways to make money in stock market. Very happy for you and your success. Didn’t know that you would be so much into it. Kudos to you bro! I pinged you on facebook….

  • arpan
    Reply
  • Syam.sethia
    Reply

    To develop intuition, we should trade and develop skills. Atleast brokers should provide some way so that we can train ourselves. They are giving trading terminals which are made before Y2K.

  • technicalanalysis_Guru
    Reply

    Very impressed to see Fyers reduced brokerage charges to 20/- only. Good to see a young company taking right steps for the sake of customers.

  • Diwakar
    Reply

    Very refreshing to read about intuition. Everywhere I read about stock markets they are only telling about probability and mathematics. I believe it is the most overused skill but the must underrated one because most intellectuals and tips providers never talk about it because others will not trust them. Keep spreading true knowledge like this.

  • tradeforcemumbai@gmail.com
    Reply

    Well written but not everyone has intuition. Using technical signals is much better according to me.

  • Traderji guru
    Reply

    On the point… although all types of trading strategies are available only gut instinct counts whethere or not it is algos.

  • Radkan
    Reply

    Hi @Tejas,

    Can NRIs invest through Fyers? If so how?

    Thanks.

  • Tejas Khoday
    Reply

    Hope you enjoyed reading it. 🙂

  • Tejas Khoday
    Reply

    Thanks.

  • Tejas Khoday
    Reply

    Hey Pankaj, of course! I enjoy writing a lot. Been doing it for a while now. Thanks, glad you like it 🙂

  • Tejas Khoday
    Reply

    Thanks Satya!

  • Tejas Khoday
    Reply

    🙂

  • Tejas Khoday
    Reply

    Hey, which is why we’re changing that. Fyers Web will have a lot of historical data which you can play with. The charting is super easy for analysis.

  • Tejas Khoday
    Reply

    Hi Radkan, Yes of-course NRIs can invest in Fyers. I have written a post about this as well: https://www.fyers.in/how-nri-can-trade-in-the-indian-stock-market/. Please write to us here and our team will get in touch with you: Open an account with us.

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