Why so many amateur traders trade only against the main trend?

Discussion in 'Strategy Development' started by crgarcia, Jul 12, 2008.

  1. And lose big as a result.

    I knew traders calling a top in crude oil since $80, and trying to find a bottom in the S&P since the 1400s.
  2. hausse


    Maybe because they missed the current trends and now think it is too late or can't find entries they perceive as low risk and hope to catch the markets when the trends turn? They'll likely miss that, too.
  3. kut2k2


    Because idiots think they can pick tops and bottoms, that's why. They take that "buy low, sell high" thing too literally.
  4. bespoke


    because half the people in this world have an IQ <= 100
  5. MGJ


    Why so many amateur traders trade only against the main trend?

    Because they think it's a good idea.
  6. The market psychology forces you to do this.

    "It had enough, it can't go any lower, shorts will cover, this is too cheap, oh look, this is a double bottom, look at the stochastics, they are crossing in oversold territory".

    In essense it makes you think, all the amateur stuff that does not cross the mind of a professional.

    I don't mean to sound rude, but basically most of the stuff you read in ET.

  7. Your all wrong.

    Traders are an independent lot.
    They believe they are smarter than next guy.
    Picking the top or bottom is proof.

    God help me it does FEEEL good!! LOL
  8. kut2k2


    Most overrated indicators: all that use the words "overbought" and "oversold."
  9. I always see people say this. Go with the trend. So I took about a thousand instruments and applied the following strategies.

    Daily & intra day
    Buy if 50 day moving average is > the 100 day moverage average
    Sell if 50 day moving average is < sell 100 day moverage average

    Buy if we are at a highest high in the past 50 days.
    Sell if we are at a lowest low in the past 50 days.

    I've also, applied several strategies if the long term trend is up, intra day it is down, or long term trend is up and intra day it is up.

    I've never found any edge w/ these strategies. :(
  10. That is because there is not any. It's all about confluence, finding the majority of the volume agreeing on a single direction, whether that's 1 trader or a million.

    #10     Jul 12, 2008