DislikedA quick post before I turn in for the day, but this is mega important. I Know of quite a few traders who have destroyed not only their accounts but also themselves by refusing to admit they are wrong, and this is usually against the trend. How many people have been blown to pieces repeatedly shorting the euro for example instead of waiting for pullbacks and trading with the trend? Loads I suspect, and I know of a few. I'm no psychologist, so why traders trade against momentum by trying to pick tops and bottoms is beyond my understanding, but traders...Ignored
![](https://resources.faireconomy.media/images/emojis/64/1f44d.png?v=15.1)
I think such behaviour mostly comes from some form of loss aversion - thinking that if I pick the top or bottom I'll be safe from whipsaws.
While one may get such a strategy to work with some effort, it clearly isn't optimal for day-trading.
One way to mitigate the risk-aversion while trading with the trend, is to use a slower moving average, and a faster Bollinger band, and to enter on pullbacks to the slower MA that touch a Bollinger band pointing in the direction of the trend or, as in the picture below, reversal.
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