Intraday trend trading is a fallacy

Last summer, my trading consisted of fading all strong moves at major S/R levels and quickly getting out with 5-20 pips of profit. Risking 2% on a 20 pip stoploss, I was able to achieve 3-10% daily increase in my capital. I took my 1000 dollar account to 4000 in about 2.5 months. This was a live account, not a demo.

Then one day, the market decided to trend strongly (several hundred pips on E/U) and I realized that I want to be trading with the trend, i.e. getting in on pullbacks and riding the whole thing. I created a simple trend-following strategy based on moving averages and it worked as long as the market was trending. I was able to achieve some profit with this, but only for a short period of time. Two weeks later, the market stopped trending (surprise?) and my gains evaporated. I can attribute this to bad money management too, since I was trying to scale into positions (i.e. add to losing positions).

To make the long story short, I lost all of my gains by trying to trade with the trend, because the trends ceased to exist. The market was ranging again, bouncing off of everything and taking money from naive traders like me.

Meanwhile, all counter-trend strategies worked like a charm. Finding intraday s/r levels and banking quick pips proved to be the most consistent strategy I've ever seen. Round numbers, pivot points, highs/lows, etc. After an over-extended move (also referred to as oversold/overbought market conditions), the price simply has to correct. Why? Because the people who made it move will be getting out of their positions, hence moving the price the other way.

Two weeks ago, I met a professional equities trader, whose personal account is over one million dollars. The guy has been on CNBC and has been trading for over 10 years. He trades intraday and in short, he fades all moves. In other words, he couldn't care less about intraday trends, he just fades it. The more extended it becomes, the more it retraces. This is exactly what I was doing last summer, except I was picking my entries more precisely.

Same thing works for what most people fear the most. News. I remember an NFP announcement last summer, during which I made over 100 pips by fading a 150 pip spike on G/J. Just wait for a strong S/R level and fade the move. Simple.

To conclude, I decided to completely abandon intraday trend trading and play only the bounces. Given that the market ranges 80% of the time, I am determined to repeat my fantastic gains from last summer.

-Tyler