Trend-following pyramid building is ultimately a strategy that yields large profits
Basically, the market tends to
eventually enter a trending phase
Many people misunderstand this, but
the market is that a trend market is the real market, and that is the market
If you put it simply, up to that point it is a “range market/noise market.”
There is a concept, but
basically, what you can call a market is a trending market
The longer the period until that trending market appears
the more profits tend to grow when the trend market succeeds
This is because automated trading exists
The existence of automated trading means that when contrarian trading occurs, profits can be made
Then such markets won't appear, right
Because traders' expectations in the market clash,
in that case, methods that exploit that counter-move are also developed
Ultimately, what remains is the trending market
This is because in the market's dynamic, the trending market eventually emerges
and the profits come to be monopolized
In particular, the FX market favors trends
In temporary markets, contrarian trading can be quite effective
However, once a trending market succeeds, profits can grow to an extraordinary extent
But at the same time, if you have previously favored contrarian trading
contrarian traders lose, and those who cannot cut losses with averaging down suffer substantial losses
From the perspective of FX dynamics
the trend market is indeed dominant
If you pyramid in the direction of the trend at that time
profits will expand dramatically
The trending market will come eventually,
so if you maintain a bias toward following the trend, you can
increase your capital from the market
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