as we all know, if we want to make money, we must be in the right side of the market, or in another word, we must ride the right trend or direction. that leaves people impression is: counter-trend is fruitless, stupid, sure to lose.why short rally or buy drop, how stupid it is. most people do not realize is: what a trend is. a trend can be a daily chart trend. or an intra-day 5minutes chart. even they donot realize is: 30~40% time market is random or trendless.the complicated is youdonot knowor hard to recognize when it is in aparticular mode. you think you are fowllowing a trend,but you may follow trendless trend or even ride a real opposite trend. we all know those dogs full of flees (down trend in a daily chart) may have some well trended intra-day chart charactics. in some particular day, they rallies with no sky fall. to a long-term swing trader, short the rally is a natural thing.but to a intra-day day trader, buy on the rise is a natural thing too. the day trader made money since it is rising on the particular day. the swing short seller ignore rising, and wait couples ofdays or weeks, the market continuess its down trend,he made good money too. like FB, it is underdog from last earning. if someone buy call or buy, most time he loses.but on some particular day, the market rallies and he gains lot. another underdog is MCP. I made 10fold gains on5.5 call recently. or in a bull run market like SPY, WFC, PNC. lots of intra-day charts are just for short sellers, and they make good money. but for long-haul investors, their patience payoff them daringly too. counter-trend right, yes. but they make money and verygood money. I made 50fold gain on my put when SPY first time hit 169+. overrall counter-trend is a very productive strategy. the market 30 to 40% sidelines, that best suits counter-trend. in a well-defined bull run, 20~30% time corrections,or counter-trend bull runs.only half time the market really goes up. you can count daily red bars in SPY. easily you can foundout "wow, those days are for short sale". the statistics will show the probaility of the counter-trend (the long-term uptrend). (roughly 33.33%). greenbars oughly 60%. for the period of Feb. to this moment. I did not count the actual move into this statistics. if I put the actual move into this statistics.the results will be a little bit more better for counter-trend day taders. from this statistics, we know we are better off in the daily timeframe, and follow the daily trend, we win. but for a day trader, get in and get out, lots of time counter-dailytrend, he can make lots money too. the stastistics doesnot favor daytrading totally. "he, I am right. I trade the daily chart,not theintra-day chart". I am a swing option trader.causally futures if special market sitaution develops. what I want to pointout here is: if you day trade, counter-daily trend is ok. if you swing trade, counter-intra-day trend is ok. since odd is in your favor. another side effect point I want to make: day trading is not a favorable game.
I agree. Leaving counter trend trades out of your trading means missing many solid opportunities. I use the pipdaq setups for trend continuation and a combination of divergence and bollinger (with the law of relativity taught by John Bollinger) combined to find good reversals. I don't find they are any less profitable either. At least the way my trades pan out!