TAC concept and why it might actually work

In my discretionary trading as of the last 6 weeks, I have been basing my trades around support and resistance, specifically S&R that have confluence of something else , AND in the direction of the TAC, which stands for trading against the crowd. Using both my brokers open position indicators on their website, and other resources like myfxbook outlook , if the crowd is 70% long or short, the proper direction to trade in is against the majority.

When I first approached this idea, I thought it was malarky , as trading against the crowd did not appeal to me as having any real reason to work. I mean, if you are going against the crowd, how on earth would that secure a trade probability? So, I guess with experience you realize why that might be a way to form a edge.

 

This image shows what the general avg gain and avg loss is per instrument. Really, which instruments really don’t matter, and some of them tie, and at different time frames and periods, different instrument tie at different times. Not the point. The really kicker here is that the avg loss is often greater than the avg gain. There is another table somewhere in the internet that will show you that more often than not, traders are right and there are more profitable trades than losing trades, which points out that when traders as a whole are wrong, they are terribly wrong.

Some trading strategies I have come across open positions based on TAC alone, and that is foolish. If there is anything I have noticed to be true in strategy developing , is that something else needs to be in confluence with whatever tool you are using.

 

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