I'd appreciate hearing your take on the following scenario: Joe trader in watching the market identifies what looks like to him as an early Pattern X recognition. Pattern X is Joe's signal to buy. So Joe, seeing that Pattern X is developing jumps in and buys. Joe's position soon is showing a loss, and thinking that "long is wrong" so short must be right, he reverses and goes net short. After a short period of time the short is showing a small loss, and Joe in reevaluating the market is more sure than ever (I was right all along he thinks) that Pattern X has finally set up fully so he switches to Long again. Wherein lies the fallacy?