Contrarian
a.k.a. Contrarian investing
A trader who deliberately goes against the crowd, buying when others are fearful and selling when they…
In plain English
A trader who deliberately goes against the crowd, buying when others are fearful and selling when they are greedy.
A contrarian reads extreme sentiment as a warning. If everyone is already bullish, who is left to buy? Tools like the AAII survey, put-call ratio and COT report help gauge the crowd.
Being contrarian is not the same as being right. Crowds can stay one-sided for a long time, and fighting a strong trend too early is expensive.
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