$USDC
"THE SILENT TRAP OF REVERSION TRADING"
When you see a market that has risen for hours, days, or weeks, you might instinctively think: "this can't go up any further, it must fall soon". It seems logical. But that logic is a trap, I'm sure you've experienced it if you've been trading for a few months.
If we were talking about sports, it's like watching a marathon runner at kilometer 15 and thinking: "he must be falling soon". What you don't see is that this runner has trained for years to maintain that pace. He is not improvising. He is executing his plan.
The market, in strong trends, is the same. There is real strength, real money, real conviction behind the movement. And believing that it "should" stop just because it has progressed "a lot" is underestimating its power, it's tempting your luck.
The psychology that sabotages your trading
Going against the trend may give you the feeling of being more "intelligent". There is a part of our ego that wants to be the one who predicts the spectacular turn.
But being a trader is not about being a fortune teller. Being a trader is about managing probabilities. You don't need to hit the top or the bottom. You need to capture high-probability segments.
Imagine you are climbing a mountain. Does it make sense to throw yourself at climbing a vertical wall without gear, just because it "seems" that you will find a ledge to hold onto? Of course not, you look for proven routes, paths where you know you have support.
In trading, those "safe routes" are the trends.
Should you avoid strong trends?
The short answer is: no, you must learn to respect them and work with them. Trying to exclusively trade reversals in strong trends is like rowing against the current in a fast-flowing river, and with a broken oar! You may advance a few meters, but you will tire quickly, lose control, and end up adrift.
When a trend is strong, the smartest thing to do is:
- Identify the dominant direction.
- Wait for controlled pullbacks.
- Enter in favor of the trend, not against it.
