Why did Livermore say that he never buys during a pullback?
Once a trend becomes strong, paranoid and fanatical, it is far beyond imagination, and its amplitude is always much higher than your calculation. It never pulls back. When it enters a pullback, it has basically reached its 3/4 stage. In the later stage, it will basically end after a little upward rush to create new highs and new lows.
Why not pull back? Because the market is unprecedentedly unified, everyone is in the same direction, so there will never be a pullback. When a pullback occurs, it is likely to be a profit-taking and a small number of test orders. This means that the trend is already heading towards the late stage. Waiting for a pullback to enter the market means that you are waiting for it to reach the late stage before entering the market. Do you think you have a way out? What is the difference between chasing trends in the late stage and joining the Kuomintang in 1949?
Many people lose money following trends. Isn't it because they chase when there is a pullback? But many people who follow trends without waiting for pullbacks also lose a lot of money. That's because you can't distinguish the levels. The daily line will not pull back, will it pull back in five minutes? The trend at the daily level is valuable. But if it doesn't pull back, you can find a low-level pullback to enter the market. Level, level, level, level is a very important factor. Many people chase a short-term trend, which is nothing more than that they don't see the trend of the big level.
Don't wait when the trend comes out. Wait until you think a good opportunity comes out, and you enter. You find that the trend has become complicated? It is difficult to make money. The market has changed from being highly unified to having differences, and then there are all kinds of struggles between the long and short sides. It's a pity that it is not complicated.
The thinking of real profit is actually different from what everyone thinks. What you think is common sense is often wrong.
