I would like some advice who had that as a main problem and solved it. How he done it. I know it's mine problem no.1, whatever I think that I need to do to trade in the direction of trend in the end I don't do it. Now I became so good in picking the tops because it's only way to get profits having this problem. But it's not the good way to trade because risk is to big and reward small. I'm aware that it's out of mine conscious control, so how to help myself, practical ideas or experiences?
You are trading in the "After the fact" mentality. 1. Get a reliable CUSTOM indicator Rigoursly backtest what it will do once it indicates the START of a trend CHANGE. 2. Only Enter at the first few bars of your indicator trend. Done.
To trade before the fact happens you must "KNOW" what will happen before it happens. Example: Putting water in a pot and boiling it. At first it doesn't bubble, But you know after 5 minutes it will bubble. This is knowing before the fact. Aka knowledge/ backtesting/ experience. Put your items into the water before it bubbles because you KNOW in 5 minutes it will start bubbling. That is how you trade with the trend.
How come that I think that the trend will reverse afther it made a move and don't belive it will be extended in the same direction as a first move? Is it just plain hard and against basic human psychology to belive in trend?
It was a problem for me until I did it wrong so many times I learned the right way to do it. What i`m saying is there is nothing wrong with counter trend trading. Just keep your risk constant, dont add to losers, look for good R/R trades...etc..etc Good luck
#1 Because you missed profits of a nice big trend and you are itching to make money so you enter at any subpar signals possible. #2 Your trend reversal indicator is not that accurate.
00009, Be informed, Trend reversals take time, Just like a car, it doesn't stop immediatdely and goes into reverse, it slows down, stops completely, then revs up, and goes reverse. So during that whole session is chop. That is why counter trending is dangerous, the section in between is chop, And it takes time for a complete reversal. If you are itching to make money, you'll enter at first sign of reversal, but you'll also be the first person to be stopped out.
I think it's also having something with feeling of blame of missing the first move and than trying to outsmart market in the next move. It's infantil thinking. I don't like the fact it's so hard to change tought patterns in trading.