We often hear some veteran traders say that trading on the right side is safer and more reliable; but we also hear others say that trading on the left side is actually more profitable and more suitable for intervention. So what is going on? How do we choose?
To make a wise choice, we must first figure out what is left-hand trading and what is right-hand trading?
First of all, we have to talk about the trend, because the left and right trading is inseparable from the trend, and it is also aimed at the trend.
For trend trading, we all understand that trading with the trend is necessary, because trading with the trend is safer and has a higher success rate; however, we also often see that when a wave of trends ends and it is fully confirmed that the trend has reversed, often A large part of the profit margin is lost.
Therefore, many traders will enter the market and do reverse transactions when they have certain basis and can be roughly judged to be top-bottom. This is what we often call left-hand trading. Compared with the original trend, the transaction on the left is a contrarian transaction, but it chooses the starting point of the new trend. If the judgment is correct, the profit will be more substantial.
However, anyone with a discerning eye also understands that although the left side of the transaction can be very profitable if the judgment is correct, but before the trend is destroyed, no one can be sure whether it is the top or the bottom at the moment. Analysts think it is a taboo for trend trading.
Therefore, many experienced traders would rather give up profit margins and wait until the trend reversal is confirmed before entering the market. This is what we often call right-hand trading. Compared with the original trend, trading on the right side belongs to trend-following trading. It is safer and more reliable to enter the market only after the original trend is destroyed and a new reverse trend is established.
However, for distinguishing between left and right transactions, many traders will use the top and bottom of historical charts to distinguish left and right transactions. In fact, this is unreasonable, because it is used to distinguish after the fact. But in every moment, it is almost impossible to determine the top and bottom with certainty. Therefore, it is more reasonable to judge the left and right transactions by the standard of trend measurement.
As shown in the figure above, many traders will enter the market on the left side of the "top" to short (red arrow), which is judged as trading on the left side, and enter the market on the right side of the "top" to short, and it is judged to be trading on the right side. This is actually wrong. Reasonable, because at the moment of the "top", no one can be sure that this is a top, so how to judge whether it is the left side or the right side?
However, if the trend line is used as a tool to measure the trend, as long as the trend line is broken, the trend can be confirmed to be broken. Therefore, entering the market to the left of the trend line (yellow arrow) means trading on the left side, while entering the market to the right of the trend line is short , is the transaction on the right. In this way, even at any moment, you can judge whether you are trading on the left or right.
In the figure above, shorting before "breaking the trend" means trading on the left side; selling short after "breaking the trend" means trading on the right side.
Then, there is another point to note that the left and right transactions we are talking about are all relative to the fixed cycle, because the judgment of the trend is different in different cycles, and sometimes the big cycle rises and the small cycle If the cycle is not fixed, it will be traded on the left side relative to the large cycle, but on the right side relative to the small cycle, or vice versa.
Therefore, different cycle frames have different judgments on left and right transactions.
Now that I understand this, is it better to trade on the left side or the right side?
First of all, we need to understand that the different technical systems of each trader will lead to different definitions of trends, which in turn will lead to different measurement standards for each trader's left and right trades. In other words, different technical systems have different judgments on left and right transactions.
As shown in the figure below, for the trendline trading system (yellow arrow) and the moving average trading system (black arrow), there are obvious differences in the judgment of the left and right positions.
Although trading on the left also needs to be done in combination with the trend, in fact, the technical system of the left trading is a combination of anti-trend trading and trend trading. That is to say, the left side of the transaction focuses on predicting the top and bottom, and enters the market at the initial stage of the formation of the new trend.
Its advantage is that if the judgment is correct, the profit margin is large; its disadvantage is that it has to bear greater risks than the right transaction.
Unlike the left side trading, the right side trading is more focused on trend tracking, does not predict the top and bottom, as long as the trend is not broken, do not do reverse trading, until it is confirmed that the old trend is broken and a new trend is established, enter field transactions.
Its advantage is that the confirmation of trend reversal is higher and entry is safer; its disadvantage is that a considerable part of the profit margin needs to be discarded.
From this, we can see that the left-hand transaction and the right-hand transaction have their own advantages and disadvantages. There is no absolute good or absolute bad. It mainly depends on your own choice.
So how do we make wise choices?
In fact, it is best for everyone to choose according to their own personality and technical system and other actual conditions. What suits you may not necessarily suit others, and what suits others may not necessarily suit you. Therefore, it is best to choose the one that suits you. of.
The following is a summary of some of my personal experience, you can refer to it.
We all know that trends are strong and weak, so we can combine this and adopt different strategies for different trends:
1. In a weak trend , if there is a top-bottom pattern or a reversal K-line pattern, or other reversal basis, you can enter the market on the left side;
2. In a strong trend , it is necessary to predict the top and bottom as little as possible, that is, to do less left-hand transactions, because in a strong trend, the top and bottom patterns or reversal K-line patterns, or other reversal basis, are often It is a trap, and will be swallowed by the inertia of the trend, so try to enter the market on the right side;
3. In the late stage of a strong trend , if there is a top-bottom pattern or a reversal K-line pattern, or other reversal basis, at this time you can properly predict the top-bottom and choose the left side to enter the market, but do not take too large a position to prevent this Level trends expand into larger level trends and move on.
In short, it is to adopt different strategies according to the inertia of different trends . If the trend is strong, the inertia will be strong, and we should try to do right-hand trading; if the trend is weak, the inertia will be weak, so we can properly do some left-hand trading, so that we can More profits can be made more safely.
In fact, for different trading cycles, each transaction may be either a left-side transaction or a right-side transaction; Not an absolute right side trader, just a biased one. Therefore, in different market environments, it is wise to adopt different strategies, and I hope you can make wise choices to continuously improve your trading performance!
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