Has anyone ever done any research into what causes losing investors (and traders) to always buy tops and sell bottoms? Or the specific emotion that triggers the loser to always feel the most confident to take a trade at the worst possible time? Basically, i'd really like get some information/insite into the thought process of a losing trading (seeing that, in order to win in a zero sum game - futures trading) the key is to simply always fade the loser. And try to understand why the hardest trades to take are always the most profitable; and the easiest trades to take are always losers.
Losing traders may buy tops, but winning traders do too... The key is not where you buy, but it is how you limit losses...
If you bought a top, you were not successful. If it went up from where you bought it, it wasn't a top was it?
It was a top when you bought it and you bought it because the formation showed it was gong to continue upward. Read up on how the strategy works; it is a good idea to be an informed trader.
winners and losers buy tops, winners take their stops/take losses, losers ride them all the way down (its the same reason everyone is smart in a bull market, losers dont take stops but the market recovers..until it doesnt)
Losers dont always buy the top everytime. A winner will often buy the exact top or bottom too. A winner will sell quickly. The loser will hold on and even buy more on the way down.
The real question should be "Why do losing traders buy tops and then fail to get out quickly enough to preserve at least 98 percent of their total liquid net worth when the trade/idea goes against them?".