The edge of reason: A thematic analysis of how professional financial traders understand analytical decision making

This study uses thematic analysis to investigate accounts of Type 2 (analytical, rational and reflective) decision-making processes in professional financial traders working in the City of London. Previous studies have focused on using qualitative methods to examine trader understanding of Type 1 decision-making (intuition and ‘gut feeling’). No published study has investigated how traders view Type 2 decisions. Findings from semi-structured interviews with 14 traders revealed two overarching themes derived from four subthemes. The first overarching theme (‘Knowledge gap’) demonstrated that traders do not find their analytical decision-making processes as accessible as dual-process theory predicts. In particular, traders failed to label processes such as reading research or evaluating data as analytical. In contrast, they viewed Type 2 decisions in a ‘saviour’ role where these processes offered traders psychological or emotional support during loss making periods. The implications of these findings are discussed with respect to the decision-training of traders, their management, and practice.