Counter-trading profits increase mainly by frequently using averaging down

Contrarian trading is whispered to be a devilish method like averaging down,

but the reality is that unless you use that devilish method,

you won’t actually earn that much.

You may earn if you’re a high earner, but

ultimately the strength of contrarian trading is

to generate profits from temporary market noise,

and the rule of thumb is to profit by averaging down.

Averaging down itself isn’t inherently risky.

If you can control the risks, it won’t become that risky.

People want to focus on losses from averaging down,

but losses tend to go in the same direction whether you’re trend-following or contrarian.

The real risk is being unable to cut losses until the end,

and simply allowing losses from contrarian averaging down to widen isn’t that risky in itself.

If you use it properly, taking a break and cutting losses as needed,

you can use it for a long time to come.

If you can maintain control, contrarian averaging down can be one of the strongest strategies.

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