I think catching falling knives is a bad idea
Updated
George Soros said "Most of the time we are punished if we go against the trend. Only at inflection points are we rewarded."
Even if we go with the overall trend on a pullback, we are going against the short term trend, and this is very punishing if done mindlessly.
Cruel game, I have to be patient all the time, wait months, and then I might have just a few hours to get my entry. I want certain price areas, a pullback in a trend after something specific happened, but I got hurt too much placing limit orders and forgetting about them. Only thing that works for me is when I get the price I want, keep my eyes on the forex pair I'm interested in. Like a spider. Doing nothing just standing there. But ready to bounce very quickly.
You go against the herd, you get trampled. What's the wall street saying? "Don't catch falling knives" right? I don't know who first said that.
Buying the dip does not mean chasing falling knives. 2018 Bitcoin "investors" wish they knew that. Some people argue, love to go for these "dirt cheap prices", good for them. My mind must be limited. As far as I am concerned investors that care about their risk reward have no business gambling on where the price will bottom. Never heard of anyone that could call falling knives bottom. If someone could do that they'd become a billionaire very soon, trillionaire even, and we would hear about it.
I'm just going to drop some examples. I look at charts I see lots of dips bottoming before trend continuation or reversal, and little bloodbaths suddenly changing direction with no warning, and these V shape reversals look so random to me I see no way to predict where they happen (but I'm sure many retail day gamblers would disagree).
Even with stocks I think...
GBPUSD a few examples
As far as I know even Bitcoin does not "just reverse"
How about Bitcoin most violent (and quick) bear markets?
Even if we go with the overall trend on a pullback, we are going against the short term trend, and this is very punishing if done mindlessly.
Cruel game, I have to be patient all the time, wait months, and then I might have just a few hours to get my entry. I want certain price areas, a pullback in a trend after something specific happened, but I got hurt too much placing limit orders and forgetting about them. Only thing that works for me is when I get the price I want, keep my eyes on the forex pair I'm interested in. Like a spider. Doing nothing just standing there. But ready to bounce very quickly.
You go against the herd, you get trampled. What's the wall street saying? "Don't catch falling knives" right? I don't know who first said that.
Buying the dip does not mean chasing falling knives. 2018 Bitcoin "investors" wish they knew that. Some people argue, love to go for these "dirt cheap prices", good for them. My mind must be limited. As far as I am concerned investors that care about their risk reward have no business gambling on where the price will bottom. Never heard of anyone that could call falling knives bottom. If someone could do that they'd become a billionaire very soon, trillionaire even, and we would hear about it.
I'm just going to drop some examples. I look at charts I see lots of dips bottoming before trend continuation or reversal, and little bloodbaths suddenly changing direction with no warning, and these V shape reversals look so random to me I see no way to predict where they happen (but I'm sure many retail day gamblers would disagree).
Even with stocks I think...
GBPUSD a few examples
As far as I know even Bitcoin does not "just reverse"
How about Bitcoin most violent (and quick) bear markets?
Note
I have a couple of examples to share.A spark of proof of why we shouldn't chase these "knifes" - or at least use stops (but not really, slippage + 50 points spreads ruins all the fun).
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