why do you trade countertrend?
D., you are the third person ever to ask me this question directly, in those same words: the first two were myself and my wife.
The short answer is – because I am a natural contrarian. I am a simple conventional guy in some ways, but in others, an intense contrarian. If there is an agreement on something, to me the normal way is to think that the majority is wrong… g/ng.
We all look for potential reversals – near moving averages, support / resistance levels, trendlines, etc. We project targets from breaks of triangles, Head and Shoulders, Fibo calculations, etc. Elliott Wave method is unique in being able to project potential reversals based on the INSIDE STRUCTURE of a move.
The sweetest situations are when you get an EW structure, completing itself INTO an important moving average or some other S/R level, especially if the sentiment data agrees with the analysis.
Trendlines get broken, and, by the same token, EW patterns often don’t work out, and have to be reevaluated in light of new data. Everything in this game is probabilistic. The important thing, in the end, is money management, and in this area EW adds ways to design meaningful stops.
So, the answer to your question is, I guess, that looking for reversals tends to work for me, and when it doesn’t, I usually know where to GTFO. Also, the entire approach seems to work better with trends lasting from several days to weeks. I’ll need to get away from wiggles and…
Ski :) |
