Do the opposite trade

Hello,
There is probably a tread about this but i couldn't find it.

Just a thought experiment.
What if you picked your trades and trade direction based on a random generator.
You would only close the trade if you made at least 1% to minimize your commission.

If trading requires you to do extensive research and have a lot of education and experience then random picks should guarantee you to lose money.

Wouldn't taking the opposite trade direction of this random system guarantee you to make money?

 

You can eliminate one variable by being bullish all the time.

 

It is possible to make money with the correct risk management and an average system. You have stumbled across one of the most important things in forex. Management of the trade and risk. If thats correct youre probability of making increases 10 fold

 

The opposite of random is random.

 

If a trader is a consistently lousy trader, doing the opposite trade might make you
very rich.

you can install an 'inverter'.
when you buy something, the inverter will convert the order to sell and vice versa.


similarly, you can sit next to a lousy trader.
if he sells, you buy and vice versa.

 

my Dad used to subscribe to metatrader signals, mainly martingalers and inverse every trade they do. Every martingaler eventually blows up, leaving behind fortunes with just the last unsuccessful trade. He did it for 2 years only. Financed his trip to Australia and his second house there.

 

Traders in their early careers sometimes do reverse their trades and take the opposite direction to their entry signals. And a significant number of them make money doing this.

But only a little consideration shows why this is the case. Inexperienced traders are attracted to reversal signals. These are some of the best known patterns and are closely followed by us amateurs: they are dramatically graphic but rarely deliver dramatic profits. They are obviously inherently counter-trend. So it should be no surprise to the longer-in-the-tooth traders that if you reverse a reversal signal you generally end up with a trend-following position. Being a trend-follower is the first thing a new trader should do but usually the last thing they want to try.

 

Brilliant, this is exactly how Jim Simons makes money.

 

May be looking at your monitor and chart upside down will help . So that one thinks of buying while otherwise he would have sold

 

So true...this may be due to beginners often jumping on to a trend when it is about to reverse...so the attraction towards reversal indicators....only to take a position against a strong trend...which continues with more force after a slight pull back.