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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