Why Trading Intuition Never Gets Better
A firefighter walks into a burning building, feels something wrong about the floor, and pulls his crew out. The floor collapses thirty seconds later. He can't explain how he knew.
That story is true, and it's most of the reason people believe in gut instinct. It's also why a lot of traders assume theirs will eventually sharpen. Mine didn't. Four years in I stopped waiting for it, not because I gave up, but because I found out why it was never going to happen.
Daniel Kahneman and Gary Klein spent a decade on opposite sides of this question. Kahneman studied where intuition fails. Klein studied firefighters and nurses whose intuition saved lives.
In 2009 they published a joint paper called "Conditions for Intuitive Expertise," and what they agreed on matters more than what they'd been arguing about. Gut instinct becomes reliable under two conditions. The environment has to contain stable...
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