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I've been trading for a few years now. Got into crypto and was heavily biased trading counter trend, which worked reasonably well in that market at the right time.
Now I find I'm always looking for a Fade or Reversal and find it hard to identity opportunities in line with the trend. This has been a consistent issue I've been trying to work on but so far without a lot of success.
With high volatility days like Friday this results in me smacking my head against the wall.
Has anyone delt with a similar problem and managed to over come it, or have any advice?
A great question posed. I would say yes, this does affect many traders.
When I first started trading back in 2009, I was very heavily biased towards the downside. I would only be looking to short the ES to the point where I would just make up reasons to put a trade on. It literally killed me and my account(s). As we know, from March 2009 the S&P/ES was in a relentless bull market and there was little old me fighting it every step of the way!
I couldn't switch my bias to be bullish, no matter what I tried. Then one day on a whim I chose to ignore one thing, price. I placed my chart straddling 2 monitors with price being visible on the monitor that I switched off. I was blind to the price for the most part and I went from there.
To contextualise what I mean here, I still marked my chart with important levels but I only traded the price action in front of me. This included trading both sides of the market. At first being bullish was alien to me, but after a few months of ignoring price I started to balance out my trading and my approach.
It wasn't until much later I figured out that by ignoring price, my mindset would shift away from my thoughts that the market was being irrational. I was subconsciously believing that the market didn't deserve to be going higher and therefore I would fight that hard right edge of the chart in the belief that it should be moving lower! Of course, it very rarely did back then.
This doesn't mean of course you can't solely be a bear or a bull (there are plenty of traders out there who only trade one side of the market), but in these instances you need to ensure your trading plan allows for that. And as a bearish trader you most certainly shouldn't be fighting an obvious bullish trend and vice versa.
For long term trading I do care what side I am on, but for day trading I don't care what side I trade. I don't even care what the price is to be honest, I just care what price is doing.
I am not saying this is the answer to make that paradigm shift. You don't even have to want to trade both sides of the market, but you absolutely should know when to stay out of one side of the market if all you trade is counter to it.
I would say overall my shift took about 6 months to a year to completely shake my bearish only POV, but I am certainly a much better trader now because of it.
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- Trade what you see. Invest in what you believe -
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