The Reason Trend Following Is More Effective and The Reason Why Trend Following Is Closer to a Holy Grail
A list of methods to increase wealth from daily market movements and from the overall market
“To make money in daily trades”
Counter-trend trading
increases because you acknowledge losses somewhere
Trend-following
increases because you acknowledge profits somewhere
“To make money from the overall market”
Counter-trend trading
ultimately loses
Trend-following
if you keep at it, profits will surge in the end
Counter-trend trading
Risk: Reward tends to become riskier as you continue
If you incur a loss, stop trading immediately; this allows you to keep increasing
Trend-following
is a method aimed at returns from the start
If you trade in daily market conditions, the only way to make a profit is to pursue temporary gains
In the overall market
Trend-following ultimately earns profit as the definite winner
Because it’s a trend-following logic, it works
Even when considering live roulette, you can understand
Trend-following ultimately yields profits
The Holy Grail is established from trend-following
Reasons why counter-trend trading is attractive
Because you can make money daily, counter-trend trading seems advantageous
Because a daily loss can be offset by daily profits, it seems advantageous
Later, when trying to grow further, you realize the market becomes trend-dominant and you can’t handle it
Repeated trial and error reveals it’s futile
That’s all
It’s a waste of time, so consider methods like trend-following or anti-martingale
You should think of methods that yield larger profits
Counter-trend averaging down yields big profits but carries large potential losses
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