Trend

The Role of Trend in Long-Term Profitability

Introduction

Markets move in waves. Sometimes they rise, sometimes they fall, sometimes they move sideways. The greatest trap for the investor is trying to guess every small move. In practice, statistically profitable trades are not found in random fluctuations but in major trends. Whoever follows the trend has the probabilities in their favor; whoever goes against it will eventually lose.

What Is a Trend

A market is in trend when its movement has a clear direction for an extended period:

Uptrend: each new high is higher than the previous one, and each new low is also higher.
Downtrend: each new low is lower than the previous one, and each new high is also lower.
Sideways: the market moves within a range, without direction.

The basic principle is simple: the probability of a trend continuing is greater than the probability of a sudden reversal.

The "Contrarian" Mistake

Many investors are tempted to go against the trend, believing "it's time to turn."

They see an upward move and enter short.
They see a decline and enter long.

In most cases, the trend continues, and these positions are destroyed. The statistical disadvantage is clear: most counter-trend trades lose.

Why Trend Is an Advantage

Statistical probability: continuation of the trend is more likely than reversal.
Crowd force: most institutions, algorithms, and large capital move with the trend, not against it.
Profit accumulation: large profits come when you let a trend develop, not when you chase small moves.

Sophos and the Trend

Sophos does not take random positions. It first investigates and confirms the direction of the trend. Only then does it open a trade. This means two things:

It avoids sideways or uncertain moves.
It participates only in markets that have already shown strength.

Thus, every trade has not only a high profit-to-risk ratio (3R–15R) but also a high probability of success, because it moves with the dominant direction.

Example

Suppose a stock has been in an uptrend for months. Sophos will look for new highs to confirm continuation and place entry only above them.

If the market continues upward, the trade will target multiples of the risk.
If the market reverses, the stop-loss will limit the loss to the predefined amount.

Result: small, controlled losses and large, decisive wins.

Long-Term Profitability

The power of trend is visible over time. An investor who tries to "catch the bottom" or the "top" will make many mistakes. An investor who follows the trend may lose sometimes, but when they win, they win multiples.

Long-term profitability does not come from guessing every move but from fully exploiting the major profitable ones.

Conclusion

Trend is the market's "line of least resistance." By moving with it, you increase probabilities and multiply results. By going against it, you play with a mathematical disadvantage.

Sophos has this rule built-in: never against the trend, never random moves. Only confirmed directions, with high profit-to-risk ratios.