[Episode 7] Is it right to ride the major trend?

The 7th installment of "System Trades for Top Intelligence" asks: Is it correct to ride a major trend?

The main site isInitiative - Future-Thinking System Trader. This covers a wider range of phenomena, but in "System Trades for Top Intelligence," we delve deeper into the themes, so we appreciate your understanding.

【Riding the Major Trend】

Riding the major trend. It is a ironclad rule in market guides to confirm the trend on the monthly and weekly charts, then also confirm on the daily chart, and to enter daytime trading in the same direction.

Is that really so?

Intuitively, it seems so, and as the saying goes, “do not catch falling knives,” entering against the momentum in a strong market often leads to losses. But even so, simply riding the major trend as the textbook prescribesdoesn’t always work well.If you are a real-money traderyou would understand this from experience. In reality, if you enter accordingly and lose, you think the market is difficult, right?

There are two problems. Markets do not move exactly as everyone thinks. Even if you are riding in the right direction, it may soon reverse. That’s it.

【Markets do not move as everyone thinks.】

Markets do not follow theory. And if on the daily chart there is an uptrend, betting on the upside during the day may indeed be correct. But I believe the guidance from intraday day trading has little influence on the direction of the monthly or weekly charts. In extreme terms, everyone buys. A market that everyone should buy isactually one you should sell.Because if buying and selling do not match, the market itself cannot exist. Most people do not realize that the market is formed because buying and selling align. The important point here is that those who accurately capture upward or downward moves are those who entered before the move begins. A market that everyone thinks will rise stops rising, and a market that everyone thinks will fall stops falling. Becauseeveryone wants to profit from price movements.

If you are trading on a daily chart, weekly charts are effective. If you are day trading, I think looking at the daily chart is useful. Neighbors are better off being on good terms, but for other timeframes, I don’t think they must be friendly with each other; in fact, counter-trend trading might be more logical. (The reason for short-term trading is to obtain more profit opportunities than a major trend.) Do you know about the villi in the small intestine? The total area is the size of a tennis court. The idea is that by breaking things down, you can gain profit opportunities even without paying attention to the major trend. In practice, you must consider commissions and slippage, but for short-term trading, the major trend might be a rough reference point for contrarian signals.

【Even if you were in the right direction, it may reverse quickly.】

People who want to profit from the market and those who want to win are of different breeds. Those who want to profit won't quickly bail after riding a trend. They know that profits take time and will endure until the payoff. Those who want to win feel an urge to take profits the moment they see unrealized gains, because profits are realized at that moment. This urge to take profits constantly arises. Do you understand this difference?

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Top Intelligence is a term derived from top athletes, meaning athletes who use their brains. Trading, like athletes, requires practice and mental imagery training. In practice, you never know what will happen, but the pursuit of results is the same as for athletes. And for that reason, you continue training. There will be times when things don’t go well, but you do not give up; you aim for the top with a resilient spirit (resilience).

Until now, elite or intelligence has been associated with fragility or delicacy like glass, but it should not be that way. We aim to unleash the so-called mixed-breed power to push forward with impact. If you are an incredibly tough top athlete, you are not a top intelligence, but a top intelligence who can endure. Let us walk together with readers toward this ideal.

As for strategy, we try to disclose it as much as possible and incorporate an open-source mindset. By output and idea refinement, let us evolve our investment techniques together.