Is counter trend trading a disease?
- Thread starter Trader.Fighter
- Start date
Quote from Redneck:
TD Bot
I agree..., except for the predicting part Sir
Junior bot
Yeah, after reading it I don't agree with the "predicting" part either.
I just copied it from Investopedia. "I got it from the internet it has to be true.".
Someone just pm'ed me and wants to sell me some swamp land in Florida, he said it was prime ocean front. I hope he will take cash.
Is counter trend trading a disease? I want to say yes ,you are sick ,but no , I do it all the time,in fact I mostly go against trend and guess what,make a lot $$$$
why so called counter -trend trading works?
first, most traders are just herd followers, they do not have brain.
when they see others dump,they dump too. when others buy, they buy too. they get burned hard each time, they donot learn since they want to get rich quick, they want easymoney, then happily forever.lottery psychology
second, bet against the trend needs courage. often it needs cool mind. when the market rallies with no sky fall, smart people often knows to take profit, only suckers try to get in, hope to see more high, and make big. that is why when aapl hit705, and I heard AAPL anaylsts talk about 800/1000, I know aapl's rally ends. nothing will last! only a period of time. that is natural law
third, most people do not know how to speculate. when everyone talks about bankruptcy, for example aapl at 10under, everyone says it will bellyup, they all look smart, that is downtrend, do not buy. they do not know another flip side: if not belly up, what will happen!
or when dow is at 6500, everyone says U.S.economy is over, did we be finished? they do not see the FED/thecgovernments work hard to bring us to new prosperity, they just deny the fact: we human being can make mess, but we can clean too. chicks dump exactly there!
warren buffet picks bottom, and an expert!
trading needs a cool mind, with ice in your blood veins
first, most traders are just herd followers, they do not have brain.
when they see others dump,they dump too. when others buy, they buy too. they get burned hard each time, they donot learn since they want to get rich quick, they want easymoney, then happily forever.lottery psychology
second, bet against the trend needs courage. often it needs cool mind. when the market rallies with no sky fall, smart people often knows to take profit, only suckers try to get in, hope to see more high, and make big. that is why when aapl hit705, and I heard AAPL anaylsts talk about 800/1000, I know aapl's rally ends. nothing will last! only a period of time. that is natural law
third, most people do not know how to speculate. when everyone talks about bankruptcy, for example aapl at 10under, everyone says it will bellyup, they all look smart, that is downtrend, do not buy. they do not know another flip side: if not belly up, what will happen!
or when dow is at 6500, everyone says U.S.economy is over, did we be finished? they do not see the FED/thecgovernments work hard to bring us to new prosperity, they just deny the fact: we human being can make mess, but we can clean too. chicks dump exactly there!
warren buffet picks bottom, and an expert!
trading needs a cool mind, with ice in your blood veins
Counter trading incorrectly, which is how most traders do it, is most definitely a disease and doing it correctly requires tons of skill and experience, which is why newcomers should stay away from it until they have many years of actual trading experience.
Typically, you need one of the following to counter trade correctly:
1) You get a solid signal in a small tf, supported by a strong trend in a higher tf, not a tf too distant, but something 3-5x higher that's looking solid (up or down) and not ambiguous as trading without the back-up of a well defined trend tends to lead to chop, which is a killer, especially in a low vix environment.
or
2) Your smaller tf begins to create technical damage in the higher one, which is typically the first solid sign of trend reversal and not so much counter trend trading but the beginning of a new trend in relation to your bigger tf.
The above assumes that you have multi-tf reading skills and trend recognition skills with solid methods for defining it else you trading blindly, ie Brooks, Hershey, and the rest of those single tf rookies.
Remember that potential resistance in uptrends and potential support in downtrends don't hold as much value as potential support in uptrends and potential resistance in downtrends, but then again many here don't even believe in trends, so why the fuck am I typing this message for, carry on people.
Typically, you need one of the following to counter trade correctly:
1) You get a solid signal in a small tf, supported by a strong trend in a higher tf, not a tf too distant, but something 3-5x higher that's looking solid (up or down) and not ambiguous as trading without the back-up of a well defined trend tends to lead to chop, which is a killer, especially in a low vix environment.
or
2) Your smaller tf begins to create technical damage in the higher one, which is typically the first solid sign of trend reversal and not so much counter trend trading but the beginning of a new trend in relation to your bigger tf.
The above assumes that you have multi-tf reading skills and trend recognition skills with solid methods for defining it else you trading blindly, ie Brooks, Hershey, and the rest of those single tf rookies.
Remember that potential resistance in uptrends and potential support in downtrends don't hold as much value as potential support in uptrends and potential resistance in downtrends, but then again many here don't even believe in trends, so why the fuck am I typing this message for, carry on people.
I'm not saying I don't make money counter trend trading. I do! But it's really not worth it, because the little that I do make counter trading is usually wiped out and some more on superstrong trend days.
But from a pure trading logic point of view, it doesn't matter trend or countertrend. You just gotta cut your losses. So, if I really think hard the real culprit of my losses was NOT CT trading but rather NOT cutting losses short.
Yet, I would still contend that going with a strong trend when you are wrong you lose LESS than countertrend a strong trend when you are wrong...
watch that bar 13. LOL ....