In simple terms, left-side trading is 'ambushing in advance', while right-side trading is 'entering after confirming the signal'.
1. Left-side trading (bottom fishing and topping)
Definition: Act in advance when there are no obvious reversal signals in price yet. For example, if you think the price has dropped enough, and despite new lows, you anticipate a rebound soon, you buy in advance (bottom fishing); or if the price is reaching new highs and you anticipate a drop, you sell in advance (topping).
Characteristics:
Counter-trend operation: Opposite to the current price trend.
Advance layout: Your actions are ahead of the market crowd.
Advantages:
Lower costs / higher profits: If you indeed catch the bottom or the top, your buying price is the lowest, and your selling price is the highest, maximizing profit margins.
High potential returns: Once the trend reverses, you are among the first to profit.
Disadvantages:
Enormous risk: You may buy in at a 'halfway' point or sell out at a 'breakthrough' point, and the price continues to move in the opposite direction, leading to deep losses or liquidation.
Against human nature: This operation requires strong contrarian thinking and discipline because you buy when others are panicking and sell when others are excited.
Low success rate: Very few people can precisely catch the bottom and the top.
2. Right-side trading (going with the trend)
Definition: Enter the market only after the reversal signal in the price trend is clearly indicated. For example, after a significant price drop, when clear signs of stabilization and upward movement appear (such as a surge in volume and breaking key resistance levels), you decide to buy (chasing up); or after a significant price increase, when clear signs of downward movement appear (such as a surge in volume and breaking key support levels), you decide to sell (chasing down).
Characteristics:
Trend-following operation: Consistent with the current price trend.
Confirmation signal: Waiting for technical indicators or price actions to give clear indications.
Advantages:
Relatively high success rate: Because you enter the market after the trend is confirmed, following the majority, the probability of losing money is relatively small.
Relatively controllable risk: Stop-loss points are easier to set and execute.
Relatively simple operation: Follow trend signals without needing too much subjective judgment.
Disadvantages:
Higher costs / smaller profit margins: You are not buying at the lowest point or selling at the highest point, but waiting for trend confirmation after the price has already moved a bit, so the profit margin will be smaller.
May miss the best timing: Sometimes the trend reversal happens too quickly, and by the time you wait for signal confirmation, you may have missed the most profitable part of the market.
Easily chase highs and sell lows: Without strict discipline, it is easy to enter the market only at the end of a trend and become a 'greater fool'.
Summary as follows
Suggestions:
For ordinary retail investors, especially beginners, right-side trading is safer and easier to grasp. Because it follows the indications of 'Mr. Market', rather than your own assumptions.
Although left-side trading sounds tempting as it can catch the bottom and top, it is truly dancing on the knife's edge, and most people end up worse off. Unless you have a very complete analysis system and strong risk control ability, it is better to wait for trend confirmation before entering.
Remember, in the cryptocurrency circle, surviving is the most important!
For more complete trading system operations, check:Base
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