If you try to correctly engage in counter-trend trading in a ranging market, you are more likely to lose
Because mechanical market judgments rarely show a range market
There are times when you can build a small trend market at a level better described as a noise market
And then the trend reverses and comes back
If you were doing reverse averaging (against the trend) at this time, you could increase it
If you think about reverse averaging in a precise range market
When a trend occurs it becomes a stop-out, so you cannot utilize the profits from reverse averaging
If you do not cut losses, reverse averaging won’t work
If you always follow the filter in the market, you will incur many stop-outs
A constant stream of stop-outs leads to reverse averaging losing
As a mechanical market judgment
It is about stop-outs after understanding the overall market
Markets fluctuate, and to use that to your advantage
Even if you aim to precisely determine a range market to avoid losses with reverse averaging, you are more prone to losing
Reverse averaging profits can grow precisely when there is ambiguity
By continuously observing the market and judging its strength to cut losses, reverse averaging can yield profits
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