When fighting the trend and insisting that the market is due to reverse itself is a sure sign that a trader will not be in the market very long. If a trader tries to catch short-term countermoves trying to make a few pips or always looking for the tops and bottoms hoping to catch the big one he is always trading against the long-term trend and against the odds.
When the market has been trending for a while and a trader has been going with the trend then the market stops for a while and looks like it will make a quick retracement. The trader jumps in for a few quick pips and get right back out again only to find that the market did not give the quick pips and continued on with the trend. Not having set a stop loss he is now looking for the next bounce to minimize the loss to only end up losing even more. The risk reward ratio is not good either. With a Large stop loss if there is a stop loss at all and only a small profit target. At times like these it is better to stick with the trend. More money will be made, less stress will be involved and the trader’s focus and connection with the market can more easily be maintains.
A trader that is going to practice countertrend trading will have to be quick and willing to take many small losses. In the long run it is better to wait out the countertrend rather than trying to make some extra pips on it.
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