9/25 Predicting the extreme low of a contrarian strategy is close to gambling
FX automated trading and EA developer Reiwa no Double-E is here.
For some people
they may want to have trades that feel good.
For example
they think about predicting the market highs and lows and taking contrarian positions.
However,
I think such things are almost gambling.
Then, have you continued to guess the highs and lows without ever going bankrupt?
Even if you take positions thinking there are highs and lows,
the market may continue to move against you, and unrealized losses grow,
and in the worst case, your account may be wiped out, right?
At the very least
as an EA developer, what is known from an EA perspective
unlike trend following, contrarian methods
tend to incur unrealized losses for a longer period.
While an EA can be automatic,
when trading manually and incurring unrealized losses
it can have a negative impact on psychology and
lead to doing unnecessary things.
Or
you may fail to reach the anticipated highs or lows
and your limit orders may not get filled.
In any case,
understand that placing limit orders is effectively contrarian.
No one can determine the exact highs or lows.
They also vary greatly with volatility.
The points where declines or advances stop
may be found by various technical methods,
but professional traders largely
wait until they identify a complete reversal before entering,
I think this is mostly how it works.
Even if it exists, for pullbacks to buy or rallies to sell
they do not go against the long-term trend,
and engage in short-term contrarian trading to profit from pullbacks and rallies,
I think that is what it is.
Trend-following with pure trend following
aims to extend profits as much as possible along the trend,
so it inevitably takes time.
It also requires the strength to hold positions.
Considering that, many people prefer
doing high-velocity scalping with contrarian trades using large lot sizes and high win rates,
and that might be popular among many.
However
as the saying goes, steady gains can be wiped out by a single large loss,
and that is something to consider.
Keeping that in mind,
if you can develop a “logics-based understanding,”
in addition to manual trading methods,
EA operation will also become better.
Well then!
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【Reiwa no Double-E: EA Listing】
https://www.gogojungle.co.jp/users/112481/products
Specifically, categorized EA of Reiwa no Double-E
https://www.gogojungle.co.jp/finance/navi/articles/67162
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【Reiwa no Double-E: Series Articles】
https://www.gogojungle.co.jp/finance/navi/series/1700
https://www.gogojungle.co.jp/finance/navi/articles/64703
https://www.gogojungle.co.jp/finance/navi/articles/65978
https://www.gogojungle.co.jp/finance/navi/articles/64738
https://www.gogojungle.co.jp/finance/navi/articles/65619
https://www.gogojungle.co.jp/finance/navi/series/1714
https://www.gogojungle.co.jp/finance/navi/series/1701
https://www.gogojungle.co.jp/finance/navi/articles/64723
https://www.gogojungle.co.jp/finance/navi/articles/65010
https://www.gogojungle.co.jp/finance/navi/series/610
【Reiwa no Double-E’s Beliefs】
