The secret to follow is to fight the trend, buy low low prices sell high high prices, buy on low sell on high
Which is better, following the trend or against the trend? Surely quickly and spontaneously, we will answer: CLEARLY FOLLOW THE TREND please! But wait, I'm sure many of you say "follow the trend" but in reality and their actions are actually "against the trend".
In theory it says follow the trend, but in practice (unconsciously) it goes against the trend. Do not believe ? Let me prove...
In day-to-day trading in real/conventional businesses, we are all very familiar with the term "buy at a low price, sell at a high price". Buy low, sell high. Buy low Sell high.
We really like when the price is lower / cheaper, the more eager to buy. This is a trading principle in real/conventional business. Why is that ? Because when we buy, have the goods, later can be sold at a higher price. We make a profit.
In real business, we hold the goods and have control over influencing "price movements". It's up to us to sell at that price, how much profit we want, it's up to us. We have the goods. Our job is to find a buyer who matches the price we set.
If it doesn't sell, just discount the price so it's easier to sell. OK. Again, we have influence and control in "moving" the price. This is the trading principle of real business. Here lies the problem.
When we enter the world of online forex trading, we have no power to influence market price movements. This is a world market. So that the principle of buying at a low price does not apply.
CHEAP OR EXPENSIVE PRICES BECOME VERY RELATIVE AND SUBJECTIVE. Prices can move "anywhere" beyond our control.
When the market is moving down, we tend to want to buy. The price goes down again, buy again. The price is getting lower and buying continues, finally it's been a long time GOOD BYE.. GAME OVER. Margin Calls.
Obviously this is a real business trading action and mindset. And this does not apply in forex trading. Remember, this is a world market and we have no power to influence price movements. We also do not hold physical goods.
So, this is the reason why many people are devastated in forex trading? They enter the world of forex trading using a real business trading mindset. DEFINITELY NOT APPLY! They failed and battered.
How many times have we heard the story of the failure of novice traders to trade with conventional business trading methods. When the price drops, buy and buy if it goes down again. Or the price goes up in the sell and continues to sell if it goes up again. They don't realize they are fighting a TREND WAVE.
Therefore, the prevailing mindset in the forex market is FOLLOW THE TREND. When the price drops, sell. When the price goes up buy.
Making changes to this mindset and action is not easy, because from childhood we have been taught to get used to the BUY LOW SELL HIGH mindset.
This new mindset (follow the trend) will give the impression of BUY HIGH SELL LOW. Usually we are afraid and anxious when we buy at high prices. Most beginners must be scared. They are more daring to do BUY LOW because this is the real business trading principle.
There is a MAIN reason why we must Follow the trend and it is not recommended to BUY LOW SELL HIGH. Because changes in trend direction never happen suddenly and instantaneously.
It takes time and is usually supported by strong fundamental news that causes the market to change direction drastically and quickly. If conditions are normal, the market is difficult to reverse. Tend to move to follow the trend.
The trend that is difficult to reverse is the trend in a long time span, namely the Daily. Usually this trend appears when the close of Friday and the weekly candle looks Strong Full body. So most likely, the trend will continue on Monday and Tuesday next week.
It takes enough flying hours and experience to be able to recognize market habit patterns. So the conclusion is,
BUY ON LOW, SELL ON HIGH is a conventional business trading mindset.
BUY ON HIGH, SELL ON LOW is a trend-following mindset in the forex market.
What do you think ?
CONSISTENT AND OPTIMAL PROFIT GREETINGS.
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