Trading in the direction of a strong trend always looks easy after the fact, but 95% of aspiring traders are incapable of doing it. If you get burned enough times as an inexperienced counter-trend trader (me), you either give up or you decide you want to be on the other side of your awful losses (me). I'm a total convert. A couple years ago if I saw BPT hit the lo ticker like it did today, I'd be looking to buy it for a bounce. Now I see that and it's an instant sell.
It's easy once you learn how, but it's one of the most counter-intuitive things I've ever done in my life, and despite a couple years of trend-following experience, there's a part of me that tries to convince me the trade will never work. I've just become accustomed to it and I know that the less comfortable I "feel" about the trade, the more likely it is to produce a quick profit. Add: The final pullback in BPT today was clearly reversing off the low of the day, and the only thing that could possibly stand in the way of a fine rally was a pesky 20-bar moving average and an overbought stochastic on the 5-min chart and if you've been following the professionals' advice here on ET you know full well that TA DOES NOT WORK. Only a totally insane person would've considered shorting there and targeting a new low.
With experience, you will realize the last 1/2 hour is bad time for pullbacks because everyone is closing out their day.
Spread is brutal here, be careful WHX had a similar story and put MONSTER rallies after brutal sell-offs. Even though it was totally irrational
Yes, but I have rules and one of them is "If something randomly catches your eye [BPT hitting the lo ticker] and you notice it's in a strong trend, look to get in on the next pullback." And I did, and the darn thing, bless it's trending soul, printed new lows right into the close, so it appears the falling knife catchers were closing out their day and probably not enjoying it much.