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The role of intuition in trading

The role of intuition in trading

Written by

Zuzanna Krychowiak

Published on

Amidst the tumult of the current digital era dominated by cryptocurrencies, we venture into uncharted waters of financial innovation. These innovations attract both seasoned traders and newcomers who are just stepping into the realm of financial possibilities offered by digital finance. In this dynamic world where fortunes rise and fall at the speed of light, a question arises that troubles many: should trading decisions be guided by the mysterious force of intuition or should we rather trust infallible data and meticulous analysis?

Defining intuition in trading

Intuition in cryptocurrency trading evolves beyond the traditional understanding as a financial sixth sense, transforming into an invaluable asset for traders. This ability to predict market fluctuations, not based on raw data but on deep, subjective feelings, becomes a cornerstone of success for many investors. Those who have succeeded in this unpredictable market often point to intuition as their financial compass, guiding their investment decisions when traditional methods of analysis fall short.

What are the advantages of an intuitive approach?

  • Speed of decision-making

In the world of cryptocurrencies, where sometimes even seconds determine profits or losses, the ability to react quickly is truly essential. Intuition enables traders to anticipate market changes, often before technical analyses can grasp them. As a result, traders can seize market opportunities faster than the competition, which in the crypto world can mean the difference between success and failure.

  • Emotional intuition

Emotions play a crucial role in investment decisions, and intuition serves as a bridge between cold data and the human element of trading. This allows for a better understanding and interpretation of market sentiments, which is invaluable in predicting price movements. Traders who can sense changes in market emotions often make beneficial decisions ahead of other market participants.

  • Early trend detection

Intuition often allows us to identify new trends before they appear on charts and data. It’s the ability to perceive subtle signals that may indicate the direction of market formation, giving traders an advantage in exploiting these trends at an early stage.

But what are the disadvantages of solely relying on intuition?

  • Uncertain future

Decisions based solely on intuition carry an element of unpredictability and increased risk. In the crypto trading world, where volatility is the daily norm, relying solely on intuition without solid data support can lead to unforeseen risks and potential losses.

  • Lack of concrete evidence

Intuition, while certainly powerful, is not based on concrete, measurable data. This means that defending and rationalizing it in a data-driven world can be challenging. Investment decisions based on intuition can be difficult to justify to others, which in a professional trading environment can be a significant limitation.

  • Subjective fog

Intuition is deeply personal and subjective, meaning it can be susceptible to erroneous interpretations of market signals. What one person may interpret as a positive signal, another may interpret as negative. Such subjectivity can lead to decisions not based on an objective understanding of the market.

Intuition in cryptocurrency trading is undoubtedly a valuable tool, but it yields the best results when used in symbiosis with solid data and analysis. Mixing intuitive market sense with thorough, objective analytical methods creates an approach that can increase our chances of success in this highly unpredictable world of cryptocurrencies. So, what should we focus on? Developing both our intuitive skills and analytical abilities. Why? To fully exploit the potential of the cryptocurrency market.

The necessity of data and analysis

Utilizing technical analysis, fundamental analysis, and delving deep into historical data is nothing less than a compass that guides traders through the turbulent waters of the cryptocurrency market. Additionally, it provides them with a strategic advantage and enables them to make decisions based on solid foundations.

Technical analysis – the art of reading charts

Technical analysis, with its advanced tools such as MACD (Moving Average Convergence Divergence), RSI (Relative Strength Index), or Fibonacci retracement, allows for predicting future price movements based on historical patterns. Traders use these techniques to identify trends, support and resistance levels, as well as potential market turning points. For example, when RSI indicates overbought conditions, it may signal an upcoming price correction, giving traders crucial insights on when to take a selling position.

Fundamental analysis – a detailed look at value

Unlike technical analysis, fundamental analysis delves into economic, financial, and other key factors that may influence the value of a cryptocurrency. This includes studying supply and demand, analyzing market news, technological innovations, regulatory changes, and the overall economic climate. Traders who employ this method often look at cryptocurrency projects through the lens of their potential impact on future applications and adoption. It serves as a guide for them on which long-term investments are worth considering. For example, an announcement of a new breakthrough blockchain technology can result in an increase in the value of a particular cryptocurrency.

Historical data – lessons from the past?

Historical data is a true treasure trove of knowledge, showing how cryptocurrency prices have reacted to various events and changes in the past. By analyzing historical data, we can identify patterns that tend to repeat, which can be valuable indicators of future market movements. For example, seasonal trends in the prices of some cryptocurrencies may suggest optimal times to buy or sell.

Data and analysis are an important element on which the success of many traders is built. They allow for making informed decisions, minimizing risk, and maximizing potential profits. Combined with intuition, which guides through the invisible streams of market emotions, they form a comprehensive strategy that can bring desired results.

The combination of iIntuition and analysis

An optimal trading strategy often goes beyond simple data analysis or relying solely on intuition. In reality, it’s the ability to combine both of these elements. By using intuition to sense subtle changes in market sentiments and then crossing these intuitions with solid, data-based analyses, we increase our awareness in making investment decisions.

How does this symbiosis work?

  • Often, it’s the trader’s intuition that captures the first signals of a trend or market sentiment change. This could be the result of observing market behaviors, industry news, or even rumors that have not yet been reflected in the data.
  • Then, these intuitive feelings are confirmed (or refuted) by technical analysis, fundamental analysis, and historical market data. This allows for an objective view of the situation, going beyond subjective interpretation.

An integrated approach to cryptocurrency trading utilizes the best of both these variants. For example, intuition may lead a trader to a potential investment opportunity, which can then be verified through technical analysis by observing indicators such as moving averages, RSI, or MACD. Fundamental analysis, on the other hand, allows for evaluating the value of a cryptocurrency based on external, economic, and financial factors such as market regulations, changes in blockchain technology, or adoption trends by major companies.


In this dynamic world of digital finance, where decisions often have to be made faster than lightning, traders are faced with a dilemma: to rely on intuition or infallible data? Intuition, often perceived as a financial sixth sense, enables the rapid capture of market trends, even before they become visible in data. On the other hand, solid technical and fundamental analysis provides strong foundations for thoughtful decisions, reducing risk and increasing the chances of success. Ultimately, the choice doesn’t lie in choosing between intuition and analysis but in the ability to combine these two elements.