Reverse thinking vs. going with the flow — how to choose?

Let me help you clarify your thinking 👇👇

When is reverse thinking suitable?

1. When market sentiment is one-sided
When almost everyone is extremely bullish or extremely bearish, and emotions have reached an extreme, prices are often pushed too high or beaten too low. At this point, thinking against the crowd may actually lead to a good entry opportunity.
2. When price approaches key support or resistance
When the market nears an important support or resistance zone, it usually becomes hesitant and oscillates repeatedly. Using reverse thinking at this stage can help you tell whether it's just a fakeout or a real reversal, allowing you to gain an advantage at key levels.
3. When the big direction and short-term rhythm are in conflict
If the long-term trend is upward but a short-term drop suddenly occurs, or if the long-term trend is downward but a sharp short-term rebound happens, this divergence often means the short-term counter-trend move is about to end and the original trend will resume. At such a time, you can consider going against the short-term fluctuation while following the larger trend.

When should you go with the flow?

1. When the trend has clearly emerged
When the upward or downward channel is obvious and the direction is well-determined, following the trend is often the easiest and most comfortable way to profit.
2. When the price decisively breaks an important level
Once the market cleanly breaks through a key resistance or falls through a key support, it usually means the price will continue moving in the direction of the breakout. At this point, you should follow the trend and trade in the breakout direction.
3. When market views are highly unanimous
When there is widely accepted good or bad news and the market forms a collective force, this consensus often pushes the price to move in one direction. Going along with this momentum makes it easier to gain.

Neither approach is absolutely good or bad — the key is to read the signals the market is currently giving.

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