Trading from Your Gut: How to Use Right Brain Instinct and Left Brain Smarts to Become a Master Trader

This book is not about picking an investment strategy or developing your own market indices dashboard to become a pro investor. The author here talks mainly about developing a sound understanding of stock market, various trading techniques (mostly technical analysis), and training yourself to trust your own guts. He believes that there is no one strategy successful for all kinds of investors.
In the first three chapters, he explains how our brain is structured and the importance of unconscious side which creates intuition. “The left brain analyzes and right brain notices”. This is kind of stuff you might have read in Blink: The Power of Thinking Without Thinking or Iconoclast: A Neuroscientist Reveals How to Think Differently . Curtis Faith has done a remarkable job in relating the different trading styles with the two sides of the brain.
In next three chapters, he has explained the basics of market, structure, trading, market inertia and momentum, repeating behaviors, cycles, candle-stick charts etc. He also tells the importance of making conscious decisions using these basics and the knowledge from first three chapters.
Last three chapters are focused on becoming a smarter trader. Once you start reading this book, you will finish it in a flow, as it is written in English and not investment/financial jargon.

The whole idea is to get smarter in your own investment strategy and not picking up a well-set formula.

Internet search engines seem able to deliver every possible answer for every imaginable question in an instant. But no software program can replicate or replace human intuition, the greatest gift any securities trader can wield. Inexplicable investment instincts arise from feelings that right-brain thoughts inspire. Dismissing these instinctive feelings may seem rational to traders with a lopsided preference for left-brain thinking. For a more balanced approach, apply rational, left-brain tests to right-brain ideas, says investor Curtis Faith, author of “Way of the Turtle”. He offers compelling evidence and personal testimony about the overlooked power of intuitive thinking in securities trading. getAbstract recommends this book to traders who want to make better use of their intuition.

Then let your brain take over and do the math first.

That’s the basic problem with Faith’s non-methodology: he says to trust your intuition, but often says that in terms of knowing when to jump on (or off) due to double tops and other technical trading signals. But you can’t know what those mean or how to let your “gut” pull the trigger if your mind hasn’t done its homework first. Due diligence is still what it’s all about, so don’t let the title of this tome fool you: there’s no shortcut to doing all the legwork of learning about a company, its products, its cashflow, its managers, and so on. Sure, once you’ve done that, you need to let all those facts and many more coalesce into a trading decision, but where’s the mystery or new information about that idea?

All in all, this book could be a quarter or less of its length and still say all the same things, albeit with far more impact. If you’ve read only a few books about market and personal trading psychology, then this may have some new stuff for you. But if you’ve already read the best stuff by guys like Tharp and Malkiel and Graham and so many others, then this book will have little if any insight to offer.

That said, it can rarely hurt to keep learning as a trader or in any other active intellectual pursuit, especially when you’re betting your own cash on it every day, even if you’re just revisiting things you already know.

So is your gut still telling you to buy this book? Now that you’ve thought about it a bit more, read some more reviews…and then trust your instinct…based on all your research!

The author seems to confuse the results from the process. Experts can trade effectively using their gut and intuition because they have internalised the rules and parameters of their systems, and can trade using their associative memory (a.k.a thinking fast using system 1). The decision to buy and sell then becomes unconscious to the expert and he/she can trust such a decision because they have been doing this for ages.

The beginner on the other hand has no such luxury of experience and skill. He will have to rely on rules and systems and follow them strictly in order to succeed. Saying a beginner can learn to follow their gut is akin to telling a new chess player that they should just play according to how they feel is right. Most beginners instincts are just plain wrong. The only way to develop the instincts of an expert is to go through 10,000 hours of deliberate practice and that is not by following instinct but rather conscious, careful application of systems and rules.

In other words, you cannot force intuition by practicing it, you can only put in the hours and trust that one day it’ll come naturally to you.

The guy writes a good book. I Googled him to find out more and it turns out he went to Jail and fleeced millions from investors; go figure. Still, a good book for us day trader types.

Another terrific work from Curtis Faith. The guy made $30,000,000 for Richard Dennis trading as one of the original Turtles. Nuf said.

This is not a trading psychology book. It is about understanding how the human mind works and how to utilize this knowledge to improve trading. I found this discussion very helpful. Went back and read it a second time to pickup as much as possible.