Continually Losing Trades? Try Counter-trading Yourself

Reading Time: 3 minutes
  • If you’ve lost a bunch of trades in a row then you could try counter-trading yourself
  • Traders have to train themselves to do the opposite of their instincts
  • You can fake it til you make it and experiment with doing the opposite of what your instincts tell you

Many cryptocurrency traders get into a rut where every trade goes against them, but the situation is different when it comes to novices of the type that typically populate the crypto market. Anyone can get lucky in a bull market, but when the market is choppy or in a downtrend is when the wheat is separated from the chaff. Novice traders are the fodder for whales, market makers, and pro traders, who eat them up for breakfast and spit them out. If you’re a novice trader who is constantly finding him or herself on the wrong end of a trade then there is a strategy that could pay off for you, at least in the short term – counter-trade yourself.

Your Instincts Are Losing You Money

So what’s the theory behind counter-trading yourself? It’s simple – if your instinct has seen you lose 10 trades in a row then doing the opposite of what your instincts are saying will probably yield better results, at least initially. The reason for this isn’t because you’re a bad trader per se, but because you haven’t adapted to the trader’s mindset yet, which is typically the opposite of that of the novice trader. Even if you made a killing on SHIB back in October you need to realize that you are not a pro trader, and sooner or later the market will get you.

There is a very good reason why you will eventually get caught out. Experienced traders, especially whales, play on the emotions of the retail investors and amateur traders that make up the bulk of the crypto space. They know the point at which novice traders will likely buy and sell and take the opposing action.

Fake It Til You Make It

As an amateur trader you do not have the technical skills to out-trade market makers and movers, so you are always one step behind. To counter this you need to hang onto their coattails and adopt the same mindset, which is easier said than done. A good start, however, is simply to fake it til you make it.

Each time you enter a trade without a cold, calculated plan you are trusting the market and your instincts to get you a profit, often basing your plan on your emotions at the time of your trade. This often means buying in at the top or selling at the bottom, with the market typically reversing just as you make your trade. This is not bad luck or coincidence – your emotions are not attuned to those of a trader and so you react in a perfectly human way…which is what they are waiting for.
Trade According to the Opposite Instinct

In order to counter this you should try following your emotions right up to the point where you execute the trade, doing everything bar pressing the button. You may well find that, given a short space of time, the market reverses right at the point you were going to either buy in or sell. This is a perfect example of the trading mindset – you need to train yourself to master not just your own emotions but the emotions of the masses in the market and act accordingly.

Once you have done this a few times you will start to adopt the right mindset, and when you’re counter trading is losing you more trades than it is winning then you know you can start to trust your instincts a bit more.