Riding the move, or leaning against it
Trend following buys in the direction the price is already moving and stays out while it falls. The contrarian approach does the opposite, buying weakness and selling strength. Neither is superior; they differ in the time frame assumed and in where each admits it was wrong. Looking at the same chart, the two arrive at opposite readings.
Buying a break above the 20-day moving average is trend following; buying a sharp drop is contrarian.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.