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To fellow RT's,
Trendfollowing in its purest form will not work. An established trend
simply means the market is making successive new highs or lows. If everyone
were to go out and place a buy stop one tick above a previous high, we'll
all be rich. We all know this is not possible. So the alternative is to
buy a pullback within an existing trend which is in itself counter-trend in
nature.
Counter-trend trading in its purest form will not work either. It
doesn't take someone with a very high IQ to realize that it is plainly
stupid to step in front of a freight train. A counter-trend strategy only
makes sense only when one tries to identify an actual change in trend and
try to get on a new trend at its earliest moments. The only sensible way to
do that is to jump on a new trend developing in the next lower timeframe in
the opposite direction.
Therefore, a supreme trader achieves a constant balance of the two.
He trades what HE SEES, NOT WHAT HE THINKS.
John
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