Hi PB,
I'd been a member of T2W for a long, long time and had heaven knows how many trades under my belt before the penny dropped that so many aspects of trading are completely counter intuitive. I wouldn't go so far as to say
if it 'feels' right - then it's probably wrong but, as a mental check for new traders, it's not a bad thought to keep in mind. However, that does't apply to experienced traders who have managed to re-wire their thinking to the extent that what was once counter intuitive is now intuitive - if that makes sense!
Take a look at this thread by Mr. Charts:
How To Make Money Trading The Markets. You'll notice a key characteristic of many (not all) of his trades is to take long positions when the stock has broken out to new highs and to take short positions when it breaks down to new lows. This isn't an easy thing to do for many traders because in the back of their minds their intuitive logic tells them:
'there can't be anyone left to buy this stock because anyone who wanted to buy it would have done so by now. Having broken out to fresh highs it must be overbought and existing longs will be looking to take their profits. Therefore, I'll look to join the shorts and clean up on the inevitable pullback or reversal back down'.
This logic ties in with your comments about PuntFX waiting for a major move and then joining in on the premise that the current trend is more likely to continue than it is to change. It pays dividends for those that can do it well, but doing what is counter intuitive isn't a winning strategy all by itself. Sadly! Pullbacks and reversals to occur, obviously, and sometimes very sharply. As always, good traders are prepared for the worst and protect themselves for when things don't pan out.
Tim.
