Fighting the market is not good for two reasons.  First, we lose money.  How much we lose depends on how well we are managing our money and controlling our risk.  Second, fighting the market affects our judgment, and causes us to try to confirm that our judgment is correct. Some very high level market analyst will persist in fighting a trend so that we will eventually be proved to be correct.  They figure that if we persist long enough, no matter how long it takes, we will eventually be right. In some cases the “technical price” level is so far away that by the time the forecast is negated, the inventor following the advice will have lost a large sum and missed a fine opportunity on the other side of the forecast!

By analogy, there is a reason for leaving your car downstream, launching your canoe upstream, and paddling downstream.  It is much easier and eminently more fun to go with the flow and paddle downstream.  We could do the opposite and paddle upstream, eventually we may even get to our destination, but the cost would be substantial.  It would take much more time, more physical and emotional stamina, and we would be constantly fighting the current.  Reaching the goal would not be worth the cost.

From a system trading point of view, it is seen from a different set of constraints. The technical or priced based strategy that gets you into a trade also has a priced based signal that says “the strategy is wrong get out ” or “the strategy is wrong reverse your positions”. The problem with relaying on price to tell you that you’re wrong is that the market does not care. So like the unmoved market analyst that says “it’s only a bear market rally”, at some point money management, risk manage has to come into play, It is a necessary evil.

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