Why is it said that trend following on long timeframes is effective
The idea of following the trend is
different from contrarian trading
losses appear first,
then profits accumulate later—the logic is
and
shorter time frames have noise plus profits not being large in pips
these are the drawbacks
Longer time frames have less noise and when they run, pips are larger
these are the advantages
In contrarian logic
profits come one after another, and you reach a market where you must take a loss at the end to escape
Even if you decide to cut losses with a break at support/resistance,
the losses simply accumulate, and even if you keep making profits, those profits are offset by the losses
As a result, you cannot fully leverage the contrarian logic and end up negative
In other words, contrarian logic
to counter a market where you must take losses, all profits get offset and more losses accumulate
No matter what measures you take, at some point a big loss will occur
In the case of trend-following, since it is the opposite version,
even if losses come one after another, profits appear at the end, so the overall result increases
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