contrarian trading

Discussion in 'Trading' started by riskfreetrading, Mar 11, 2008.

  1. contrarian here does not mean trading opposite to the crowd. It means trading opposite of your conclusions on whether you should go long, short, or do nothing. So work very hard doing an excellent analysis, and at the end do the exact opposite of your conclusion.

    It should work very well because the majority work hard, reach conclusions and yet fail. What do you think?
  2. It won't work, you could end up with the same results. You won't learn from your mistakes, you'll have nothing to build on.
  3. It might be logical and work if it wasn't for things called commissions and slippage.

    Trading is a negative sum game.
  4. People typically don't lose because of strategy. They lose managing their trade incorrectly.
  5. You are absolutely correct HoldyGrail. It is one of the reasons people in forex trading for instance lose their capital. They do not even know that house leverage is a source of their death. I read a short article here that I think explain well this point in the case of forex.
  6. I also think it is a negative sum game. However on in bull leg, it is a positive game for longs, and in a bear leg it is a positive sum game for shorts. That is why it is so important to trade with the trend.