David Paul’s Three Rules for Trading Experts:
A good trade is a tough trade.
David Paul indicates that trades that seem uncomfortable or require courage to take are often the most profitable. The "easy" trades that everyone feels comfortable with can be risky due to groupthink.
2. Short-term trend reversal versus long-term trend
Paul prefers to enter trades that go against the short-term trend but align with the long-term trend. For example, if the overall trend is upward, he may wait for a temporary pullback (correction) to enter a buy trade.
3. Place entry orders where others place stop-loss orders
Paul advises placing entry orders in the areas where he expects others to place stop-loss orders, such as below the lows or above the previous highs. This is because the market often moves to test these areas before heading in the expected direction.
