imho in trading terms the herd consist of masses without the functional method
therefore each and every trade of someone with the functional method is a bet against the herd
What Does It Mean To Bet Against The Herd ???
- Thread starter Fundlord
- Start date
imho in trading terms the herd consist of masses without the functional method
therefore each and every trade of someone with the functional method is a bet against the herd
IMO contrarians tend to be value investors and while some may operate on shorting overvalued stocks, I would think it more common for a contrarian to go long on under-valued stocks. This doesn't seem like a style of investing that would align with a day trader at all. Day traders don't care about the intrinsic value of a company.
A contrarian is betting that the stock will return to its intrinsic value at some point at that they will be able to buy at a discount in the meantime.
Because he is a fool.
if your method calls for that (for example your system indicates resistans at this level) you should short it
Exactly !
The right thing for trader is to follow his method., even if it means loosing money on some particular trade.
But the method should be the right one
But sometimes the buyers(the herd) buy at the ask, at higher and higher prices; and at other times the sellers(the herd) are selling at the bid, at lower and lower prices
Maybe to get a great price on the short? Averaging shorts into rallies can be extremely lucrative. surf
and destructive too.