Why Trending Markets Punish Early Countertrend Trades

After a strong directional move, it's tempting to call the top or bottom.

A market that looks overextended can continue moving as aggressive traders keep pressing in the same direction.

Instead of automatically fading the move, I ask whether the trend is still making progress and whether pullbacks are being defended.

Countertrend trades can work, but they need a clear rationale and defined risk.

An expensive-looking price isn't necessarily an exhausted market.