How often does trading against the market trend increase your profits?

[Perfectbaby]

I never meant to post this but, I believe here is the main section to share about trading experience when the right topic is not raised yet. However, I wouldn’t mind saying that there are people who not share this because they felt this is nothing to share and they can handle it, the fact is that; any trader who has refused to ask questions in other for them to learn is actually loosing track and could land themselves into making more losses at last.

Okay, here is the question; few days past let me say beginning of Friday/ Saturday we see that the markets touched 62k at this point I had this feeling to enter a position against the market direction to see if there could be any magic to happen, I actually used low leverage where i wouldn’t be that easily getting liquidated, and when I open the position I noticed that the market hits 65k and after it touches that I had to pick the little profits. This is my first time of experimenting this but I know that it won’t regularly repeat itself but I felt that sometimes doing the reverse could help at time. Have you tried this before and how does it happen, do you end up losing more ? Since most time people talks about not trading against the market trend if you must make profit.

[retaur]

With leverage it's often cheaper to go against the market trend but it's usually expensive either way and that resolved itself as well as more people try to trade on the cheaper side or spot support and resistance that might hold up and keep an asset moving in the direction that opposes the overall trend.

Since there are multiple timeframes and multiple trends it's common for an asset to broadly move in both directions as well. In a bear market, the asset moves down but has some upwards movements where it faces support. The inverse is also true as well.

[slaman29]

I'm not sure actually that I ever 'followed or went against' market trends as a basis for my trades. Long term investment, anyway, you always go with trends and this is why for example Bitcoin should never be shorted in longterm multiyear trade.

But what I'm seeing from your post isn't a strategy, its a gut feeling. And there is where you're going wrong. Base a trade on a system, a way of thought, base it on your TA, not based on 'let me try find magic' lol

I mean, was your leverage even truly safe? Did you ask yourself what your exit was (both loss and profit?). At least start with these questions first if you're testing a gut trade.

[Oshosondy]

You are using long term bull and bear market to think of a trend, the trend for now is bullish up to the $65000. You traded towards the trends and not against it. Bitcoin fall below $58000, but you opened long position when it increased back to $62000, that means you traded not again the trend.

[sergiorus]

Every time you open a position you go both with and against the trend. The difference is time frames.

Each time frame can have different trend and which one suits you best depens on how long you intend to keep the position open.

Even if overall trend is, say, bearish on HTF, but there's a clear bullish formation (say, iH&S) on 5m chart, there's nothing wrong to open a scalp trade to catch this small upside move. In this particular situation you would go "with the trend".

[PostQuantumBTC]

Each time frame can have different trend and which one suits you best depens on how long you intend to keep the position open.

This is the problem that most traders are having, they do not want to turn unrealized loss into swing trading. It can be frustrating but it has helped me before as I stayed longer without closing any position,  but it depends on the trend. Right now I can stay longer with bitcoin long.

Even if overall trend is, say, bearish on HTF, but there's a clear bullish formation (say, iH&S) on 5m chart, there's nothing wrong to open a scalp trade to catch this small upside move. In this particular situation you would go "with the trend".

Are you using the 5m chart? I have tried it before in the past but it is very risky. No indicators are 30% accurate using 5m chart. I use at least 15m chart which I am still very careful with but I will prefer longer one like 4hr or 1d.

[sergiorus]

Are you using the 5m chart? I have tried it before in the past but it is very risky. No indicators are 30% accurate using 5m chart. I use at least 15m chart which I am still very careful with but I will prefer longer one like 4hr or 1d.

I don't but I knew a guy who was a very good and profitable scalper. He used 1 to 5 minute charts and doing lots of quick trades throughout the day. He used BNB to pay lower fees too.

He said the trend changes all the time on low time frames so he just looked for typical reversal patterns and traded them very quickly.

[GreatArkansas]

I never meant to post this but, I believe here is the main section to share about trading experience when the right topic is not raised yet. However, I wouldn’t mind saying that there are people who not share this because they felt this is nothing to share and they can handle it, the fact is that; any trader who has refused to ask questions in other for them to learn is actually loosing track and could land themselves into making more losses at last.

Okay, here is the question; few days past let me say beginning of Friday/ Saturday we see that the markets touched 62k at this point I had this feeling to enter a position against the market direction to see if there could be any magic to happen, I actually used low leverage where i wouldn’t be that easily getting liquidated, and when I open the position I noticed that the market hits 65k and after it touches that I had to pick the little profits. This is my first time of experimenting this but I know that it won’t regularly repeat itself but I felt that sometimes doing the reverse could help at time. Have you tried this before and how does it happen, do you end up losing more ? Since most time people talks about not trading against the market trend if you must make profit.

For me, most traders lose more than they gain doing this regularly, so it works better as an occasional bet with tight risk control than a habit.

It seems this will be some traders' preference, but for me, I'm more into trend, where trend trades tend to win more often over time because you have the market's momentum on your side instead of against it. If you keep trying to catch reversals, set strict stop losses and only risk small amounts, since one bad guess can wipe out several good ones.

[coinlary]

Flow with the direction of the market .  In forex (especially synthetic markets) it's generally a dumb Idea to trade angains an active market but it all depends on how active the market is, your risk and your capital.

Bitcoin at the current stage is likely safe to trade against as it will eventually  reverse anyway but that  doesn't  mean you can't  loose money if the market decide  to take a little ride with the bears for a while before favoring your  trade. So the important aspect will be , what are you risking ?

I wouldn't recommend a long term trade against the market either , just a short one like what you did is enough even though it's a dumb idea  if done blindly (basically gambling) .

I wouldn't recommend trading BTC either just buy and hold it and you will be fine .

[Aanuoluwatofunmi]

Don't let your experimenting stage push you to trading if you are not really familiar with the market performance and having the ability of taking the risk to trade, this has happened to so many people in a similar manner, whereby do we made a first attempt and get it right and this will be the reason why they will only go into trading and eventually end up losing massively, experience it more by continuing in your trading in this manner, trading with little capital.

[Lida93]

 There's reasons for the advise to traders about not having the attitude of trading against market trend, it's not that it's a bad trading strategy but It's just about how you can be making many losses going against the trend than when you following it meticulously. The chances of a trend reversing is almost about 3 in 10 cases from what I have observed. And I have also taken time to know that it's easier to confirm a trend to not be a noise than proofing it could reverse just immediately.

Whatever side a trader may choose to go with they shouldn't ignore applying risk management measures like the use of TP and SL, then low leverage shouldn't be ignored as well, most times, some trader forgets that as high as the anticipated profit to be made equally as the loss too

[Zaguru12]

Okay, here is the question; few days past let me say beginning of Friday/ Saturday we see that the markets touched 62k at this point I had this feeling to enter a position against the market direction to see if there could be any magic to happen, I actually used low leverage where i wouldn’t be that easily getting liquidated, and when I open the position I noticed that the market hits 65k and after it touches that I had to pick the little profits. This is my first time of experimenting this but I know that it won’t regularly repeat itself but I felt that sometimes doing the reverse could help at time. Have you tried this before and how does it happen, do you end up losing more ? Since most time people talks about not trading against the market trend if you must make profit.

Trading against the market trend doesn’t mean that all of that trade will end in loses, there are periods where the trend will change and you might have just managed to caught it right in time. This might not be a trend change actually but just a little ranging market. The percentage of this happening is actually small but it’s possible and the risk that is high is the reason why it is not advisable. It is usually considered as gambling if you don’t have any fundamentals backing the decision to go against the market.

I don't but I knew a guy who was a very good and profitable scalper. He used 1 to 5 minute charts and doing lots of quick trades throughout the day. He used BNB to pay lower fees too.

He said the trend changes all the time on low time frames so he just looked for typical reversal patterns and traded them very quickly.

Yes going against the market is actually possible as scalper using a short term trend like 1-5 mins, there is no analysis backing a scalper they just gamble it like that, the  reason is that even during any trend there is a ranging market between the trends.

[Junii]

Hahaha i have tried it before and few trades ended in profit while the losing trades were usually bigger because the overall trend kept going in the same direction. That is why i only consider counter trend trades when there are strong signs of a reversal not just because i feel the market has gone too far. The trade you take work at that time because the market pulled back after your entry but whether the same setup would still be profitable after 50 or 100 similar trades or not. As for your experiment that is completely fine. But if you keep trying this again and again  you might end up ignoring or even forgetting the strategy that already works well for you. Sticking to a proven strategy is usually better than constantly experimenting during live trades.

[Alphakilo]

Flow with the direction of the market .  In forex (especially synthetic markets) it's generally a dumb Idea to trade angains an active market but it all depends on how active the market is, your risk and your capital.

Bitcoin at the current stage is likely safe to trade against as it will eventually  reverse anyway but that  doesn't  mean you can't  loose money if the market decide  to take a little ride with the bears for a while before favoring your  trade. So the important aspect will be , what are you risking ?

I wouldn't recommend a long term trade against the market either , just a short one like what you did is enough even though it's a dumb idea  if done blindly (basically gambling) .

I wouldn't recommend trading BTC either just buy and hold it and you will be fine .

I would never recommend trading with Bitcoin, instead holding it is better.

OP though, did a brilliant thing by using a low leverage and took profit quite quickly and easily without acting on the greed of getting more.
As you said trading with, instead of trading against the trend is a wiser move, but in a case where one intends to trade following counter trend bounces, such a trader must  use very tight stop loss, avoid buying more that may lower average entry position, always be in and out just like OP did because this ain't a trade of long term holding.

Looking for a quick scalp of small profit is better than long term hold, same goes for trading counter trends, because it isn't a strategy to hold onto, but a short term trade for quick small profit scalp which makes your confidence grow and stimulates your mind.

[ZAINmalik75]

People who say that you shouldn't trade against the market are right to say that because what happened here doesn't happen all the time, and most of the times when the market trend is going one way, and you open a trade on the other way, like if the market is dropping, you open a long position in futures and hope that it will reverse very soon and you will make some profits, it might happen sometimes, like how it did for your trade and you made some profits, but mostly, the trend will continue for at least some more time, and then you realize that if you had went with the trend, you could have already exited with profits.

There is nothing wrong with experiments, especially when you know how to properly manage the risks and don't use very high leverage or large funds, but some people actually make the mistake of using large leverage and then they regret it later. When market is going up, it stops for a bit, they feel that it is time for a reversal because it might go red a bit in one candle, but it could always be a trap, and those who get trapped then get liquidated because the trend quickly continues again in the same direction; going up.

[rat03gopoh]

I'm not sure your position is going against the market trend. Bitcoin hasn't made a new lower low since the beginning of the month on the 1-hour timeframe. The market has attempted to break through the 62k mark twice, which automatically forms a strong support area. After the third failure, we can conclude the chart is trending sideways, with the 61.8k to 62.3k area as the lower limit.

[jcojci]

Sometime but not to often especially if I feel doubt with the market movement. Maybe I make a little profit because I can't always profit doing that so that still good for me. This situation can giving you profit if you can analyze carefully because if you can take the low position and wait until the price increases, you can make a profit. If you rinse and repeat, the chance of bigger profit will be there but you should be careful and have a strong control of greediness. That can prevents you to take the profit that you should take.

[JeffBrad12]

You're going against the higher timeframe trend but you're not going against the lower timeframe trend. You're basically buying the bounce, happens a lot if yout rade 5m - 30m timeframe especially with bitcoin.
It's actually one of the easier way to make profit from the market, when the price has dumped so deep the candle become elongated, if you open position at the right time you can easily make profit instantly.
I do this often and have made some quite good bucks out of it, I personally have always been confident when I encounter things like this.

[Wakate]

Sometime but not to often especially if I feel doubt with the market movement. Maybe I make a little profit because I can't always profit doing that so that still good for me. This situation can giving you profit if you can analyze carefully because if you can take the low position and wait until the price increases, you can make a profit. If you rinse and repeat, the chance of bigger profit will be there but you should be careful and have a strong control of greediness. That can prevents you to take the profit that you should take.

I know there are traders that often like to trade against the trend and they can make profits if they are lucky enough for price to move to the direction of their analysis but this doesn't happen every time unless when their is sudden news in the market trying to change the direction of everything. I have tried to trade against the market trend few times and I lost due to the false signal I saw.

[Perfectbaby]

You are using long term bull and bear market to think of a trend, the trend for now is bullish up to the $65000. You traded towards the trends and not against it. Bitcoin fall below $58000, but you opened long position when it increased back to $62000, that means you traded not again the trend.

It went higher above 62k and it was exactly 65k and I took quick profit from the market. Of course you are right and it was what I meant to say maybe I didn’t use the right words.
Thank you for correction. And from what I am currently observing now it seems before we would cross this month of July to first week of August we may likely have bitcoin touches 70k and whomever that has enough liquidity can open a long time position with a smaller leverage so that they wouldn’t get liquidated so easily.