We translate the content while keeping HTML structure: Taking contrarian positions stems from having trend-following phobia
Trend-following paranoia emerges when
you have first been taught that counter-trend trading is effective
in other words, it is a belief transmitted from seminar sellers
because trend-following will become ultimately effective
and that final effective part is conceptually extremely vague
so people think counter-trend is effective and try to target with counter-trend
counter-trend is effective and can also be the correct judgment as trend-following
if you keep counter-trending and it returns, it also functions as a trend-following signal
it often captures the head and body of the trend-following
however, when market conditions favor trend-following strongly
counter-trend becomes merely believing the signal in the opposite direction
as a bias, the burden is that “humans cannot endure it”
therefore you just continue counter-trending even in strong trend markets
therefore there is no choice but to overcome something like trend-following phobia
trend-following becomes effective only with time
and whether you can endure the long, dull work until then
trend-following is quite weak in normal markets
if you take profits mid-way with trend-following, you will lose
so it’s better to enter with a reserved-trade (limited exposure) for trend-following
basically it’s just trend-following plus leaving it be
only trades that aim when trend-following succeeds
this too can be achieved with automated trading
so the need for discretion is doubtful
but that does not mean
FX cannot be traded like poker
it is only possible with zero-cut style account-move trading
because of trend-following phobia, you end up counter-trending
in strong-trend markets you end up counter-trending
the resulting mindset can be so shocking it may become gambling addiction
ultimately, trend-following becomes the theory
counter-trend divides the trading quantity into parts
trend-following does not divide the trading quantity
to illustrate that ratio
if counter-trend is viewed for win-rate and stability
trend-following is viewed for profit and instability
trend-following phobia stems from an unstable mindset
you can tell by looking at past markets
if in past markets there wasn’t a strong trend-following environment
you would consider counter-trend effective, and begin to justify that counter-trend has flaws but is effective
there is no choice but to start with trend-following from the beginning
success of trend-following is also a matter of luck
if you are stopped out, even if market shifts to a strong trend later, you’ve still lost
even if the market’s strength is unleashed, if you were losing, it’s meaningless
but with counter-trend you can simply average down
there is no such dragging
however, when thinking about the concept of trend-following phobia
it implies that a single shot is better than averaging down
in zero-cut fund-transfer trades, one-shot plus high risk trading becomes
a situation where profits are strong
from a stability/ money-trade perspective
that means it does not yield profits
trend-following averaging down involves stability and profit views
so you enter the market anytime
therefore combined with trend-following phobia
you want to operate with a profit goal and misinterpret that as “not suitable for me”
but in reality trend-following is more suited and more profitable
this is what seminar sellers mislead you about
trend-following is
like placing a reserved trend-following order and then “leaving it at that”
one shot in terms of meaning is “taking on less risk”
the more you have experienced profits from counter-trend averaging down with win-rate and stability perspectives
the more you develop allergy or fear toward trend-following
so you must think about how you can make yourself able to perform trend-following and leave it as is
latent risk and latent return
are different between counter-trend and trend-following
averaging down and one-shot are the same
the latent return is more present in counter-trend averaging down
the latent risk is larger in counter-trend averaging down
the latent risk is larger in trend-following
the latent return is larger in trend-following
the correct approach is to trade only when latent returns exist
that naturally leads to a logic of trend-following plus leaving it be or trend-following with a pillar of leaving it be
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