The wise are instructed by reason, average minds by experience, the stupid by necessity and the brute by instinct.
Marcus Tullius Cicero
Nobel laureate Herbert A. Simon, a professor of psychology and computer science at Carnegie Mellon University who has studied human decision making for decades, thinks that we are able to develop a "gut instinct" because experience enables us to "chunk" information so that we can store and retrieve it easily. Our brains then "cross-index" this stored information, automatically finding patterns in one area that correspond to patterns in another.
- What went right?
- What went wrong?
- How could it have been better?
- How could it have been worse?
Again, ask your colleagues for their opinions. Do they agree with your views on what went right and wrong? If not why not? The conclusions you draw from your actual experiences are the most valuable resources you have. They are collectively the foundation of your future decisions, the bedrock on which your future success will be built. Make sure those conclusions are valid and your instinct for making the right decisions, in any situation, will inevitably get better. If you do this in earnest, I promise you an improvement in your trading, more and more as time goes on.
PrudentTrader Archives 2004