Contrarian Trading (Part 2 How to make 30% monthly)

We have discussed in my previous post how we are hardwired through evolution to follow the crowd as a safety mechanism to aid with our survival. So this ends up, however, screwing up a lot of people that are trying to play the market because they cannot resist the movement of the crowd....its all about fear and greed. When the market starts to crash, they see everyone selling and they fear loss, so they sell to prevent further loss, taking a loss in the process and exacerbating the drop of the market itself as everyone starts to pile on a big drop by selling. On the flip side, when the market is roaring they feel greed and actually begin to fear the loss of gain as they see everyone piling on the market especially near the peak of the market. If I could show you a graph of the late 1990s and the amount of greed that started to spool up, you would see the majority of people getting in right near the end of the climb: because at this point, the crowd incorrectly percieves that the market will continue to advance, possibly forever.
Here's an example: I was over at a friends house in the late 1990's and he had a portfolio on his online trading account spread out over the tech sector. The tech sector at that time was the golden child of the Nasdaq and was enjoying super gains in the late '90s. One day while I was visting him in the morning he turned on the news as saw the market was severely down that morning. Moaning, he ran to his computer and turned it on and saw red on all his stocks. "Oh God Oh God Oh God," he said as he started panic selling all his stocks. "Hey, what are you doing?" I said. "You are just going to exit at a low, and in 2-3 days or even a week its going to bounce back and you are going to take a loss, then the stock is just going to go right back up!" I went on to add, "What you should be doing is taking advantage of this dip and BUYING more stock instead of SELLING it for a loss." He wasn't even hearing me, his primal fear had kicked in, the fear of further loss. He was thinking about his bills. He was thinking about his mortgage payment, his car payments. "I can't lose this money", he said. "It took a while to earn this to invest."
He was doing it like 90% of people out there do it. Buy high and sell low. Fear and Greed, working right against the results that you are looking for.
Do you know who really profited on the recession and the 2007-2009 housing meltdown? The rich. The housing market when the bubble burst had house prices down 40-60% with people walking away from their mortgages and basically leaving blood in the streets. While everyone was destitute and bankrupt, they simply moved in with the money they had waiting and picked and chose good cheap properties that were flattened in price and snapped them up. A few years later, these properties then bounced back in price and the rich made bank. Do you know who these rich people were? They were Contrarians. When the market was raging and there was a big housing bubble with inflated prices, the Contrarians didnt buy anything at the top. They just sat there and waited for the crash.
A contrarian does the opposite of what the crowd does. And since the crowd is wrong on one side, and on the other side  the contrarian is correct, with the ratio of 1: 1,000, or 1:100,000 or even 1:1,000,000 makes a Contrarian very rich.
I am a contrarian trader and this is how I use it on my site:

To be continued tommorrow