Go with the flow, right?
So system trading is a sham, brokers can't be trusted, stop-loss orders don't stop losses, and gaps don't always get filled. Is nothing sacred?*
Well, when all else has failed and you are watching your life savings efficiently funnel themselves into other peoples' pockets on your state-of-the-art trading software, your broker will often pull out another hoary old adage : "Go with the flow". "You keep fighting the market", he tells you with all the tenderness and concern of a leech on a pig's haunch, "you're only playing it one way - you should go with the flow..."
Brokers like this expression so much they've invented another one that means the same thing : "The trend is your friend". Why are brokers so fond of mouthing these two aphorisms? Because...
1 It makes them sound smart.
Think about it : what exactly is the "flow" or the "trend"? The truth is it's an ever-changing ebb and flow of sentiment that, like the sea, can change direction at any time.
More importantly : the graph-line on a 5-minute chart may well be apparently heading upwards while the same market on a 60-minute chart is heading downwards, and then again on a daily chart it's heading upwards, but hey! - look at that strong down-trend on the monthly chart...
In short : one man's up-trend is another man's down-trend, and both can change direction at any time. Sorry.
* Actually yes, it's on Page 1.
The contents of this website are copyright © Tim Bowyer 2004-5 ~ All rights reserved ~ No reproduction
in any form allowed, except for Appendix 2 for non-commercial use. This website is managed by Active Audiences.