"Be greedy when others are fearful."
You are a lonely hunter. When retail traders are panic selling at the bottom, you are aggressively buying. When euphoria hits the mainstream, you are shorting. You trade the extremes of market sentiment, capitalizing on panic and greed.
When you are right, your entries are the exact absolute bottoms and tops, offering insane risk-to-reward ratios.
Catching falling knives. Being early is indistinguishable from being wrong. You often suffer significant drawdown before the reversal actually happens.
Catching Falling Knives in Parabolic Trends. Fading strong institutional momentum trends leads to scaling into losing positions (Martingale tendency) and sudden catastrophic daily drawdown breach.
Strictly prohibit adding to losing positions. Require a confirmed structural shift (Change of Character / Market Structure Shift) on lower timeframes before attempting counter-trend reversal entries.