Why fight the trend?

Quote from cashmoney69:

if you think about it, everyone is really a counter trend trader when you look at the large picture. A day trader playing the bull market for his time frame may be trading against the trend on the 1hr, or daily.

A trend is just a retracement within a much larger trend.

heres a picture to show my point :D
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Also this was one of the hardest concepts to grasp when I first started out. Looking at some many different time frames can get over-whelming. Not to mention the fact, one does not need that many charts, because either your a day trader, or your not. No one should need more than three charts MAX.

I mainly use only one, but whatever works is the bottom line.
 
Quote from hairdresser:

What is it that people always want to trade counter trend on ET?
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No idea, but fading extremes is a great strategy and by definition involves trading "counter trend". The trick is identifying an extreme, and not fading a trend before one is reached.
 
I agree that there may be a reversal of the trend and I have hedged against a slight downside by buying the EWG put; however, I am mostly on the long-side.

I believe it will go down about 10% or up as much as 25%. Can you afford to lose 25% or more if the market goes against you?

I believe fighting the trend makes sense, but use puts instead. For instance, if a stock is at $75 and you can sell a $50 put to buy it 33% lower, it might be a good idea to deposit $5,000 and get the premium from the option. Or you can buy a $70 to $80 put and try to profit from a decline in the stock price but lock in your maximum loss of your premium.
 
Quote from aquaswim47:



I believe fighting the trend makes sense, but use puts instead. For instance, if a stock is at $75 and you can sell a $50 put to buy it 33% lower, it might be a good idea to deposit $5,000 and get the premium from the option. Or you can buy a $70 to $80 put and try to profit from a decline in the stock price but lock in your maximum loss of your premium.
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Remember that you may get the stock put to you, which means you have a maximum loss of $5,000 with the put. You sell puts if you think the stock will rise in value after it is executed. You BUY puts when you think the stock will fall in value.
 
Theres the pump and dump and there's the trend. I've made money trying to stuff a pump and dump and have been killed throwing in the towel only to be right.

Fighting both can mean disaster
 
Everyone wants to have a say here about trading "with" or "counter" "trend", but no one actually defined what trend is. i would suggest with so many interpretations of the word available this may have been a good place to start?
 
there are a million ways to trade some people might scalp on counter trends while someone else is swinging an uptrend on a different time scale same instrument. Do whatever works for you!

I used to get so pissed with people trying to fight the trends but I just don't care anymore there are so many ways to make and lose money that its not even worth thinking about why someone else does something.
 
the culpit of trend fighting is fear.

you want a bootom price, that is the safest price to buy.
you want a peak price, that is the safest price to short.

but in wahtever way, whether counter-trend or trend following or whatever trading strategies, actually they bear nothing different. if you do not have a plan, particularly cutting loss exit point, you may be caught into deep hole.

there is no advantages about trend following over counter-trending. if someone picked the bottom in march and hold till now, they already millionarire instantly. warren buffet did that, of course he failed in recent bottom picking.

in a bull market, buy dip may work very well. in a bear market, short sharp rally work pretty well. in a consolidation no where market, buy support or short resiatance pays off pretty well.

it depends on which one suits your psychology
 
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