A few weeks back I was in a noted trend follower’s office. They just happened to be buying crude oil that day — at around $55. This trader remarked how tough it is to take the trades at “highs”. From any historical perspective $55 is near the all-time high, but as this trader pointed out he had no idea how much higher it could go so the best he could do was follow his trading system and go long crude oil at $55.
Today I received an email from a reader asking, “how far into a trend do I still enter? Is there a practical limit of when to not enter anymore? Do I still enter or is it already too late? Are there some rules here?”
The contrast between these two men is clear.