Trade Against Instinct — Why Opposite Moves Often Win-To The Moon - Tiger Brokers Online Investing Community

Trade Against Instinct — Why Opposite Moves Often Win

Remember opposite day?

Here’s some situations where you do the opposite of what human nature is telling you to do:

1) All of social media agrees on direction

- human nature: confidence up, size up, feels good

- what you should do: be very cautious, consensus usually shows up WAY too late

2) Price breaks below key psychological level that everyone is watching

- human nature: stop out / sell

- what you should do: see if level is quickly recovered, and if so, look for entry

3) Bad news

- human nature: sell immediately

- what you should do: see how price reacts to news…if no selling pressure? Buy

4) Big green (or red) candle

- human nature: chase it right away

- what you should do: wait for the candle to close (based on the timeframe you're trading). If the candle closes with strength? Buy

5) Stock grinding higher

- human nature: too boring...take profits and chase something else

- what you should do: let it ride, slow trends can be strongest

6) Sharp flush or panic selloff

- human nature: dump position + flatten/flip to short

- what you should do: relax (if you have stops in place), look for exhaustion...volume spike + reclaim = good opp

7) You get stopped out

- human nature: revenge trade + "i'll make it all back"

- what you should do: pause, reassess, take a break

Context + process > impulse

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