Trading against the market.
Most recommendations advise trading with the trend; trend strategies are considered less risky and more profitable.
But there is also a category of traders who prefer to trade contrary to the existing trend, and such trading in most cases turns out to be more profitable than classic trading.
The reason for this situation is that when opening a trade following a trend, you very rarely enter the market at the best price. In most cases, you are already too late and in the middle of the trend.
By opening a trade against the trend, the investor expects a quick reversal, and if his expectations are met, the order is opened in a better place.
You shouldn't think that you can make money simply by opening a trade against the existing trend; such behavior looks more than naive.
This type of trading also implies the presence of a well-thought-out strategy, which is based on an assessment of the real value of the selected asset.
The most obvious example of such a strategy is buying shares that have collapsed due to panic. As a rule, negative news puts excessive pressure on the market price and it falls below the real value of the share.
The second factor that indicates an unjustified fall in price is the unjustified impact of the news. For example, the director of one of the companies was caught in an intimate relationship with his secretary, this caused a significant fall in the value of the company's shares.
It can be said that the decline is temporary, more of a panic-like nature, than a real reduction in the value of the company's assets.
Panic has made fortunes on more than one occasion, with the biggest gains coming from trading against the trend.
The third point to consider when trading against the trend is the proximity of the bottom, if you rush to open a deal, you may not wait for profit. Yes, the trend may reverse after some time, but will you be able to withstand the price pressure?
Well, the fourth rule that everyone who chooses to work against the market must follow is the ability to wait. You should not rush to open deals if there is no panic mood for a particular instrument.
The strategy of trading against the trend can become a lifeline for traders who can’t get into profit, perhaps a radical change strategies This is exactly what will help them succeed in trading on the stock exchange.
