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Recently, while keeping an eye on those sudden big pump and big dump fluctuations, a thought crossed my mind: what if I open positions in the opposite direction?
When you see a big pump, short it; when you see a big dump, go long. Focus on profiting from those pullbacks or rebounds. Theoretically, when market sentiment is overly heated, the probability of a reversal is indeed not small.
However, this approach needs to be paired with stop-loss, otherwise, you will be directly wrecked when encountering a real trend. Has anyone tried this contrarian thinking? How reliable is the actual combat effect?