Monday, March 29, 2010
Book Review: Trading From Your Gut
Back to my personal review of this book ever since i first bought it. First of all, two words to summarise the main point of this book: "implicit learning"
Earlier part of this book, it is broken down into explaining how does our brain work, whether in trading or learning anything else. To simplify, our left brain (the rational one, who can't conclude without giving a logical explanation) "learns" and "recognises" pattern as we gather knowledge, while the right brain (the creative one, who doesn't know why he knows) "draws" these learned pattern (instantly) from the back of our mind, i think they call it the subsconscious mind not necessarily with a logical explanation.. thats why its subtitle: How to use Right Brain Instinct & Left Brain Smarts to become a Master Trader.
In his examples of trading (mainly on stocks), Faith emphasises the importance of swing trading, a more suitable strategy when combining the power of both the left and the right brain. Something about this book reminds me of another book I read last year, that is Blink by Malcolm Gladwell. We might think that we can use out gut feeling in things right away by getting just the "feel" of it. But hell no, Faith tells you that only by having enough practice (and a great deal of it), by "training" your left brain into recognising patterns and systems, then are you able to use your gut feel effectively. Malcolm wrote the same concept in his book. Like an instant recognition or an answer subconsciously, without consciously able to define why you know it. Unless you studied the subject on psychology, I'm sure it gets more or less confusing, but thats implicit learning, I supposed.
Curtis explains a lot about the importance of applying trading using both sides of the brain. A lot of technical terms about intuition and psychological aspect earlier in the book, which makes me a little sleepy with those technical tones.
The author also shared a current book he is working on - Forex trading. Overall, Trading from Your Gut is a great book with many insights of learning and psychological knowledge on trading. Looking forward to his next book.