Amateur traders like to gamble with great risks—they prefer to buy on upward breakouts and short sell on downward breakouts.
When amateur traders see a breakout, they immediately expect to get rich in a new major trend.
Professional investors, on the other hand, have a different approach; they like to trade against the direction of divergence, waiting for the market to return to normal.
Professional investors know that breakouts are often a consuming movement that usually ends abruptly. That is also why they prefer to exit during a breakout—trading in the opposite direction of the breakout.
Once an upward breakout stagnates, they begin to short sell; or when a downward breakout starts to return to a consolidation range, they begin to buy.
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