"Going with the flow" is the simplest principle in trading. However, the real danger often lies not in going against the trend, but in treating the trend as a certainty.
The market is best at creating illusions; when it rises, it seems like it will never stop; when it falls, it feels like it will never hit bottom. The trap we are most likely to fall into is mistaking the current continuity for future certainty.
The market is best at creating illusions; when it rises, it seems like it will never stop; when it falls, it feels like it will never hit bottom. The trap we are most likely to fall into is mistaking the current continuity for future certainty.