Trend Following And Contrarian Investing

February 6th, 2012 by admin

Trend following and contrarian investing are two different approaches used in day trading. Both are similar because day traders have to make assumptions based on trends in both cases. The nature of their assumption is completely opposite though. When you learn how to day trade with the trend following strategy, you assume that the trend will continue. Prices are expected to rise and fall and decisions are to be made on these expectations. But if you use the contrarian investing strategy, you assume that a trend will go the other direction and not continue. Again, decisions are made based on these expectations.

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