In forex, well all markets, we assume that we must always trade with the trend.
Why?
If everyones going with the trend and the average trader is a loser, why would you want to do that?
If price has moved up significantly and looks to be in an uptrend, why would we want to get in? If so we're assuming the trend will continue, who says it will? Given that price only trends 15% of the time, the probability of the trend continuing is pretty unlikely, so what are we doing?
This is a fundamental assumption of most of our trading systems, if it doesn't hold then a revision of our paradigm would be in order.
p.s. if anyones studying this or ideas similar to this (testing fundamental assumptions), please pm me, it'd be nice to collude with others.
Why?
If everyones going with the trend and the average trader is a loser, why would you want to do that?
If price has moved up significantly and looks to be in an uptrend, why would we want to get in? If so we're assuming the trend will continue, who says it will? Given that price only trends 15% of the time, the probability of the trend continuing is pretty unlikely, so what are we doing?
This is a fundamental assumption of most of our trading systems, if it doesn't hold then a revision of our paradigm would be in order.
p.s. if anyones studying this or ideas similar to this (testing fundamental assumptions), please pm me, it'd be nice to collude with others.