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Picking tops and bottoms is a statistically fraught trading approach, however markets do change direction. Trading with a contrarian approach – against the prevailing view or trend – therefore needs to be well thought out and executed. Trend of course is relative to individual perspective, but the concept holds across time frames with only a change in intensity. When our view on the market carries a strong backing of analysis via technicals, fundamantals and/or market conditions; an opportunity that passes the evaluation is theoretically a better one. However, when the call is made less on objective analysis and more on a general expectation or worse a rumor and questionable conspiracy; the success of the trade grows increasingly more suspect. We look at the difference between contrarianism and complacency/conspiracy as well as what it can do to our trading in today’s Strategy Video.

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