Right Brain Trading In
A Left Brain World

Some characteristics commonly associated with right brain thinking include:

Creativity: The right hemisphere is often associated with artistic and creative abilities, such as visual arts, music, and imagination. Right brain thinkers may excel in thinking outside the box, coming up with novel ideas, and making connections between seemingly unrelated concepts.

Visual-spatial skills: The right hemisphere plays a crucial role in visual-spatial perception and understanding the relationships between objects in space. Right brain thinkers may have a strong sense of spatial orientation, the ability to visualize concepts, and a talent for recognizing patterns and spatial relationships.

After developing a passion for reading stock charts that has lasted for decades, I realized early on that I could see charts in a way that the average person could not.

My chart reading skills developed over time, out of necessity. Let me explain how: Throughout my school years I had a pretty bad case of ADD. My focusing “skills” got worse and worse over the years and once I gained some interest in stock trading, it wasn’t via reading reams and reams of financial reports which was a pretty good yawnfest for me. Not only did I lack the ability to comprehend what all the numbers truly meant in the grand scheme of things. I also had plenty of evidence that even great fundamentals did not always drive a stock’s prices northward on an expected time frame.

If you have read Nicholas Darvas' 'How I Made $2 Million In the Stock Market,' you will find that he had a similar evolution where despite having an in-depth knowledge of a company’s fundamentals and picking the best companies based on that, he was still losing money on his stock picks. This led him to re-evaluate his stock selection criteria and he had one eureka moment where he thought “why not just buy stocks that are going up and tag along for the ride!” 

He tried that and it worked like gangbusters. Using just $36,000 he had saved while traveling the world as a professional dancer back in the 1960’s and making his trades via telegram, was able to turn his stake into two million dollars at a time when that would be considered a fortune.

Many other well-known and famous traders like Dan Zanger turned small amounts of money into fortunes of their own using the Darvas principles of momentum trading.

My initial foray into trading his system was sketchy and I learned later, after reverse engineering many of the trades that the market conditions were not ideal for that style of momentum trading. Many other professional traders who were Darvas acolytes got much more focused on short-term trading to adapt to the changing market conditions. This included Toni Turner, who was a big fan of the Darvas style of trading and even wrote a book on 'Short-Term Trading in the New Stock Market.'

Adapting to changing market conditions is not always easy to see while you are in the middle of a strong bull market. This is especially true when a handful of stocks are propping up the market, as happened in much of 2021.

My approach to the Darvas style of trading evolved when I discovered ‘stock cycles.’ I later figured out that these cycles were not just a 'stock' thing, but an 'energy' thing driven by cause and effect. Perhaps you have heard of the concept of IFTTT (If This Then That), which is based on the idea of creating connections between different online services and devices, enabling seamless interaction between them. These connections are established through applets, which consist of two parts: a trigger and an action. 

The trigger is the ‘If This’ part of the statement, which defines the event or condition activates the applet. For example, a trigger could be receiving an email, a specific weather condition, or a new post on a social media platform. So, here's how it relates to trading: When a particular price advance happens in a specific manner (I know this may sound elementary, but bear with me), we will use that signal for the following purpose:

For example, if Stock A experiences a 55% breakout within X number of days, we will interpret it as a sign that the stock's character has changed. This concept was beautifully described in Nicholas Darvas' book: 

“If a tempestuous beauty were to jump on a table and do a wild dance, no one would be particularly astonished. That is the sort of characteristic behavior people have come to expect from her. But if a dignified matron were suddenly to do the same, this would be unusual and people would immediately say, "There is something strange here-something has happened. In the same way, I decided that if a usually inactive stock suddenly became active I would consider this unusual, and if it also advanced in price I would buy it. I would assume that somewhere behind the out-of-the-ordinary movement there was a group who had some good information. By buying the stock I would become their silent partner.”

Therefore, once we observe this change of character, it is time to start paying attention.

As I am a highly visual person, simply reading about what a stock is 'supposed to do and when it is supposed to do it' was insufficient for me. I began drilling down and putting one stock up against another to see if there were any recurring patterns.

Keep in mind that I was not studying just any ordinary stock; my focus was solely on the 'best of breed' stocks. Stocks that had achieved gains of 100%, 200%, 300%, or even more, often within a short period of time the recurring patterns I started noticing through my visual approach to stock selection, driven by my 'right brain,' began to yield results. Repeatedly, I observed that depending on how swiftly a stock resolved its initial price advance (which I later termed as its 'Vector'), the gentle manner in which it pulled back into a consolidation zone would present an excellent entry opportunity for the trade. This is where the concept of cycles became relevant.

In contrast to the Darvas style of trading, which would wait for an established trend before entering a trade, my approach aimed to capture the onset of a new super-cycle or key cycle pullbacks within these 'super-cycle' channels.

The significant advantage of this approach was that in the initial phases of a new super-cycle, when a stock is in the process of 'gathering strength' for its upward push, the quality of its initial breakout in terms of momentum (which I referred to as BMI or Breakout Momentum Indicator) and the speed of its breakout (Vector or VR) combined with the quality of its pullback to align with to where my newfound cycles lined up, would telegraph to me the long-term potential of a trade.

Would you rather be in a stock that is going to go up 123% in six months or one that will go up 564% in 11-months?

The pullback into these zones where these cycles setup (on the monthly time frame, these opportunity windows could be as short as 1-2 weeks), could offer very finite opportunities to get into a trade before most traders were even aware of the potential for the trade since it was in a pullback (sideways or downtrend). By employing this strategy, the option prices on these 'stealth' trades could be significantly more advantageous compared to waiting for a breakout and purchasing the stock after the option has already increased by 100% or more.

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Therefore, by utilizing this initial trigger 'If This,' we develop scenarios based on the quality of the initial attention-grabbing price spike (its BMI & Vector) to determine the anticipated turning point 'Then That.’ YEXT, right on schedule, reached the TM-1 Cycle in mid-May and surged with an 86% gain over the next month.

This is the power of utilizing a right brain visual (and sixth grade math) approach to trading. By using the correct cycles based on the first stage of the breakout we don’t need to spend hours researching a company’s fundamentals (unless of course we want to). We just position ourselves in the trade at these cycle windows if the price action confirms a ‘price squeeze’ is coming into the trade.

You can download Our 3-Signal report (here)

Now, let’s delve into another aspect of right brain thinking: intuition. Intuitive decision-making is often associated with right brain thinking. It involves relying on gut feelings, hunches, and nonverbal cues to guide decision-making processes.

Using intuition for trading is a skill that, with few exceptions, is certainly developed over time. If you've heard the saying "Intuition guided by experience," it is likely a significant factor behind ideas seemingly popping into your head about specific stocks to buy or strategies to implement. If you have dedicated ample time to thinking, reading, studying, and observing how businesses succeed or fail, it is quite probable that, perhaps without your awareness, you have engaged in a considerable amount of subconscious processing, leading to investment ideas spontaneously emerging in your mind.

However, there are moments when a trading or investing idea subtly presents itself, and we sometimes dismiss these moments as mere 'stray thoughts.' I am reminded of a time in the 1980s when I was a real estate investor, and during my regular visits to the local Home Depot store, I noticed a poster on the window promoting Home Depot stock. I distinctly recall thinking to myself, "This is a fantastic store" (as it was one of the first few stores they opened), and I should genuinely consider purchasing the stock. While I do not possess an exceptional memory (except when it comes to stock charts, where I have a near-photographic memory of numerous high-performing charts), I vividly recall standing at the counter at one of their first stores on Memorial Drive in Stone Mountain, Georgia. I remember thinking not only should I buy the stock but if I don’t I’m going to look back in a few decades and wish I had (Part 1: I didn’t Part 2: I did ☹).

The stock at the time was just twenty-five cents a share. $10,000 invested back then was $16 million at its peak in 2021!

I even later met one of the founders of Home Depot, Bernie Marcus, when I was a contractor selling and installing swimming pool ionization systems. I had no idea that his company would eventually dominate the home improvement industry.

Now, don't even get me started on Bitcoin; it's another missed opportunity due to not following a hunch, this miss runs in the BILLIONS :( 

Clearing one's mind and tapping into the often-subtle clues that enter our psyche is the first step. The second step is assigning value to these signals and taking action.

After experiencing health problems in my 20's and becoming hyper-aware of my intuition as a means of survival, I began to appreciate the sometimes subtle and sometimes not-so-subtle cues that the universe provides if we are open to them. It may have been helpful that, at the time, even though I was spiritually agnostic, I remember getting down on my knees and expressing to the universe, "If there is something out there, you better help me because in about six months, I am going to 'check out' since I was not truly living, just existing.”

The fatigue I felt was overwhelming, and getting out of bed was a struggle. This seemingly set off a chain of 'amazing coincidences' that not only led me on a journey to regain my health but also introduced me to many profoundly influential people who played a major role in helping me find a newfound purpose in life. Many of the health ideas that seemingly 'fell into my lap' will be the subject of my future writings. It was proof to me that no matter how dire one's health may seem, there is always the potential for significant improvement. Throughout my journey back to health, I was astonished by the number of intuitive insights I received about various health therapies to try, supplements to take, books to read, and so on.

During a period of a few years, I dedicated myself to reading hundreds of books on health, attending health conferences, and even interviewing alternative and naturopathic physicians as the Director of an Integrated Healthcare Association. I immersed myself in learning about how the body works, which therapies and health modalities were effective for various conditions, and how to achieve and maintain homeostasis throughout life.

I vividly remember that during that time, I would regularly have very specific health questions answered just by randomly flipping to a particular page in a book I picked up at a health food store. It convinced me that there was some guiding force directing my journey then and even to this day.

A few years ago, one of my childhood neighbors took his own life. I later learned from his mother that he had been dealing with severe health issues and felt awful all the time. He believed that life wasn't worth living and tragically ended his own life just across the street from where I grew up. I wish I had the opportunity to share my story with him and the steps I took to regain my health, but unfortunately, I had lost touch with him.

If you or someone you know is dealing with significant health issues and would like some guidance, please reach out to me through my website, and I will respond as soon as possible. However, I want to clarify that, although I once held the position of Director of an Integrative Healthcare Association, I am not a doctor. What I can offer is my own personal experience and what helped me on my journey to wellness, which may provide you with some ideas of your own. I firmly believe in the concept of 'biochemical individuality.' While there are certain universal health habits that most people can benefit from, everyone's body is unique, and the best approach to regaining health is to develop a burning desire to get well. Rest assured that information will come your way to guide you on how to improve your health.

The AIHA (Integrated Healthcare Association) approach to achieving or regaining health is most effective when a holistic perspective is embraced. Medical doctors who are knowledgeable in integrative care or functional medicine are often the best choice. These doctors understand when it's appropriate to pursue alternative therapies and when conventional approaches are more suitable for individual conditions. Unfortunately, due to the influence of the medical lobby and pharmaceutical industry on healthcare, a comprehensive approach to health is not typically taught in medical schools (likely by design). Therefore, you may need to explore options outside the conventional healthcare system to find the right integrative doctor.

Naturopathic practitioners who work closely with integrative-minded medical doctors can also be a valuable resource in your journey towards health.

Over time, I began to realize the power of listening to one's inner voice, and paying attention to ‘signs’ the universe may be laying at your doorstep. 

For those who are starting their investment journey, I encourage you to seek opportunities for long-term wealth building alongside a more active and aggressive approach to managing your investments. Look for stocks that you would hold for two, three, or even four decades or longer. Unlike previous generations, where success might have been found in traditional brick-and-mortar businesses, today's stocks with significant long-term potential are often found in the technology sector, which tends to experience high growth (in QUALITY companies).

To position yourself to act on strong hunches, educate yourself by reading books like "How to Make Money in Stocks" by the late William O'Neil, "How I Made $2,000,000 in the Stock Market" by Nicholas Darvas, or "The Intelligent Investor" by Benjamin Graham, which Warren Buffett considers the best book on investing ever written.

This generation faces challenges in their investment horizon due to the burden of a bloated federal debt, which has left our nation effectively bankrupt. At some point, we may no longer be able to rely on printing money to solve our financial problems. Additionally, the regulatory environment driven by politicians in Washington, primarily leaning towards the Big Nanny State mentality, poses additional obstacles. I will delve further into these topics in future blog posts.

I've recently begun practicing and strengthening my awareness of my intuitive capabilities. One ability that I've had for many years, but didn't pay much attention to, is the ability to know the exact time before looking at a clock. It seems that this skill is not unusual, as I've heard others have it too. Perhaps there's an internal clock that we aren't consciously aware of.

Since I tend to take power naps after the market closes and dislike the sound of my iPhone alarm, I am usually able to wake up within 10-15 seconds of it going off consistently throughout the week. I know, it's a strange skill. I have no significant doubt about the power of intuition and right brain thinking. In fact, I believe it's a skill that some are naturally blessed with, while others may need to work a bit more to develop it.

Throughout my trading life, I've found that many ideas about trading come to me through intuition, often when I'm half asleep, just before waking up. Some of these intuitive insights can be attributed to 'Intuition guided by experience,' which is likely influenced by the incredible power of the subconscious mind.

I believe I have been blessed with a fair amount of intuition, and I can recall two incidents from my life that go beyond random chance and demonstrate the power of intuition or hunches. When I was fourteen years old in junior high, while walking down the sidewalk at school, I looked over to my left at one of my fellow students, and a voice in my head said, "He'll be dead within two weeks." Naturally, I was taken aback because it had never happened to me before.

A few weeks later, while playing football at a friend's house, another friend approached me and said, "Did you hear about Chuck D. dying of a heart attack yesterday?" I was blown away because it confirmed what I had heard weeks earlier. I didn't share the voice I heard with my friends at the time, as I doubted they would believe me.

This is just one of the many experiences I've had with the power of intuition, along with other incidents that go beyond what some might call 'psychic phenomena' and would strain credibility. I'm reminded of an acting class I took in my 30s, where we were instructed to tune into another person's energy through feelings. In one exercise, we faced back-to-back and tried to "sense" the color the other person was thinking of and sending to us. Out of six attempts, I correctly guessed five of them, and even on the sixth one, I initially picked the right color but changed my answer, only to discover that my initial choice was correct.

So, the odds of someone picking the right choice 6 times in a row out of 7 choices (7 primary colors) are approximately 0.0001898, or roughly 1 in 5,270. It doesn't seem very random to me. For those who doubt the power of intuition and dismiss it as 'too out there,' let me share a few stories that might make you reconsider your assumptions.

During the time when I was a real estate investor, I met a lot of interesting and successful people.  One in fact was a music producer for the band 'Yes' back in the 1970's.  He happened to be selling his house in East Point, Georgia and had called me because I advertised to buy homes in Atlanta.  Now the back story on this was that a few weeks prior to his call I had remembered the epic rock song 'Starship Trooper' from way back when and for some strange reason downloaded  and was playing it over and over just before I met him.

After he told me he was the producer for Yes (the richly layered rock orchestration of their master musicians Steve Howe, Jon Anderson, Rick Wakeman, Chris Squire is unlike any other) I was blown away. Of all of the songs I could have been playing on a loop in the few weeks prior, it was THAT one!  

In Johnny Cash’s autobiography he shares a story of him and his wife June Carter Cash walking on the streets of New York on a Sunday morning after a concert the evening before and looking for a place to attend church. They dipped into a church they found along the way and after they walked in and realized that they were there after mass had started, they walked towards the front pew where the only apparent seat was open.

When they got there and sat down, everyone around them began to laugh. They thought that was kind of strange, not very welcoming coming from church people.

The pastor stopped the service and came forward and apologized to Johnny and June and explained that the young man that they had sat down beside had been telling people for weeks that Johnny Cash was going to come to church and sit beside him, so they needed to leave that seat open. Everyone was shocked that the young man’s intuition was spot on, and Johnny Cash was sitting beside him at that very moment.

A few years ago, I shared this story with a friend who is an avowed atheist and I said to him, now how can you dismiss something like this as just 'random and coincidental' and not believe that it is a sign that there is something more to the universe than we can fathom? Because that is just silly. He still dismissed it as random, and it made me wonder how he had gotten that far in life (he was in his 70’s) convinced that he 'had it all figured out.'

To be so convinced that there “is nothing else out there” that you would dismiss something that is apparently a million (probably billion) to one odds as 'coincidental' is the height of arrogance and narrow thinking, just because it doesn’t fit your preconceived notions.

If you doubt the existence of 'energy' that surrounds us, all you have to do is watch an episode of Stan Lee’s Superhumans where a Chinese Qigong master goes to a pasture full of cows right before feeding time when they are the most active and full of energy. After 10'-15’ of guiding energy to each of them one by one from afar, he has nearly the entire herd of cows sleeping or laying down, which was very unusual and unheard of given it being feeding time.

So, for those who think that it’s the power of suggestion that allows the Qigong Master to do this, remember we are talking about COWS, there is no power of suggestion especially since they weren’t even paying attention to him.

Now again, it’s little stories like these that cement my conviction of there being 'something out there' that there is an energy that we can tap into and express through our intuitive capabilities. Over the years, I’ve had dozens of these experiences of my own that left me no doubt of the spiritual nature of our existence and I feel blessed that wondering if there is a God or infinite intelligence, etc. occupies literally no real estate in my psyche.

So, if you are wondering "ok that’s neat, but what does it have to do with trading.” Am I saying that you can use intuition to make decisions about what stocks to buy and when to buy them? No, I am not saying that. In fact, my own experiences with using intuition in the stock selection process are erratic and unpredictable. But then again, I haven’t made a concerted effort to strengthen my capabilities in that area, and as you well know, a muscle that you allow to atrophy just needs a little exercise to bring it back.

Also, I think somehow the big guy upstairs has more important things to do than ensure that I am consistently picking the right stocks. I’m sure, that’s why 'he' gave me a brain and the ability to use it to do this on my own. Maybe that’s where this 'out of this world' cycle analysis really came from….hmmmmmm 

More Intuitive Clarity Coming In Future Blogs 😉

Paul Lemal
Big Kahuna Trading Club


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