[5-Min Knowledge] The Ultimate Battle: Counter-trend vs. Trend-following — Correct Usage by Market Environment
※This article can be read in5 minutes
Chapter 1: When to put an end to the eternal question
“Contra trend, or with the trend?”
This is one of the oldest and deepest questions in the world of trading.
When the market is overheated, do you think, “We should sell here”?
Or do you continue buying, believing it will rise further?
Do you challenge the end of the trend, or ride along with it?
There is not a single answer to this question.
But one thing is clear.
That is,“the optimal strategy changes depending on the market environment”.
In this article, we will thoroughly delve into the essence of the two main strategies, contrarian and trend-following, and clarify when, why, and how each is effective.
And we want to provide you, the reader, with wisdom and guidance so that you can confidently choose and execute a strategy in any market situation.