MrRenev
Education

Trading styles. Part 4/5. Countertrend trading.

There are 2 types of people that do countertrend:
- Those at the very bottom
- Those at the very top

(For those that did not learn maths post high school or is it in high school and didn't learn by themselves either: this does not mean that ALL people at the bottom or at the top do this... I think the majority of bottom feeders go for this, but for those at the top it is the minority like people that play noob champions in video games, bottom 10% perma pick them but they are rare at top 1% level - rare but not non existant).

I have a correction to make on this series, I messed up.
Trading styles. Part 1/5. The 4 different kinds of bottoms. ==> This does not fit in the list.
It should be:
1/4 Pullbacks
2/4 Continuation
3/4 Countertrend
4/4 Ranging
Bonus - Exotic strategies

Bottom buying and top selling is an element of pullbacks and countertrend but should not get its separate thing.

Countertrend can be going against the short term trend with the higher TF trend but this is rather buying pullbacks.

Here I am talking about going against the high TF trend and getting out on a lower TF.

As I have shown clearly on BTC this works. But as alot of bears that got decimated on the way up have clearly shown this is not that easy.
You had to be really picky, enter as close to the top as possible based on many factors (and risk missing out obviously), and then babysit that trade closely.
Most noobs still have not figured out how anyone that kept shorting could possibly have made money so... Clearly this is advanced .

The problem here is that the bottom 10 or maybe even 33% really think they are at the top. They are completely delusional. Ego takes over or something.
Just look at Robinhood casual investors... All going against trends.

The OGs/pros keep repeating to go with the trend but they think they can outsmart everyone.
Jesse Lauriston Livermore said around 100 years ago "I never buy on reactions... I never go short on rallies..." and "In my method of trading... I BUY after a stock makes a new HIGH".

There have been people consistently profitable picking tops and bottoms (both pullbacks and countertrend) so it is not impossible, still, there are a microscopic minority and most people should not try going for this.

The thing is, this is what I do ... Pullbacks and Countertrend. tried continuation and ranging too but it is too much I just do not want to lose my focus go do too much.
I did not choose this it chose me. I have always been nitty picky and careful and "seeing things". Since I started, at the very start, I saw crypto alts pullback and give huge RR and high probability bottoms. Also going for breaks and such is annoying to me, have to be close to the PC , never goes how I want etc...

Most people have clearly shown that they hate missing out! They keep repeating it they made it really clear! So why even consider going agaisnt trends? How stupid!
You have to miss out all the time for it to work. If you follow the trend like most people and easiest way to make money, you get rewarded the more you FOMO, the faster you FOMO (as long as you know when to get out).

More examples of predictable countertrend things:

At the very first few times it happens ignore but after a certain amounts of times the patterns repeat itself the exact same way... Got to take risks to get gains.
At some point probably stops working...

With BTC there was also a period where someone dumped every day at the same exact time last year. Was easy to hop on and short just before it happened regardless of the trend, as long as the whale kept dumping. I think it lasted a good 2 weeks.

I have a rule it is usually do not short anything at all time high (or buy all time low) unless you have very solid reasons for it... This sounds subjective. This is why only the best can go for it. The not best will find anything and count it as a very solid reason.
Price can go up 150% before going down. So precision is necessary too.

Actually my countertrend strategy is not even pure countertrend it is a mix somewhere between countertrend ranging and pullback.
My other main strategy (got 2 main ones) is really going with the trend on a pullback.











Do not trade corrections. And looking for the end of a trend sucks too but resistance + extension + momentum can probably work.
Entering at the end of an ABC is cool it is what I do all the time, and and ABC might be a 12345 cannot always tell.

This is a pullback trade not countertrade, even thought I think the new dominant trend is a bear one:


Ah yes, most noobs buy something when it is "overbought", it is truly the most idiotic thing. Had to be somethign started as a prank there is no way.
Unless you have insider info or saw a pattern repeat over and over going agaisnt strong momentum is idiotic.
I do not even understand how those that do this are able to survive. They have help... No way they survive on their own. Mum perhaps?

I also think people look at chart patterns that are only for continuation and apply them to go against the trend.

There are those that incorrectly identify the trend thought... somehow...

So I guess biggest dificulties:

"When the majority of people extrapolate the past in a bull cycle and expect the future to be the same, they usually are right and we are pretty early in the cycle"
- Warren Dalio
Nice stuff, too bad i'm not a shorter, just not my thing but still interesting
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MrRenev Je_Buurman
@Je_Buurman, So only crypto and only buy? Must get boring at times every time. I'd say 60% of the time.
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Je_Buurman MrRenev
@MrRenev, more like 90% :(
who knows what the future might bring, maybe i'll find some alternatives
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