A bubble is formed when valuations deviate from intrinsic value due to a crowd. A contrarian is one acts opposite of what a crowd does. So what is a crowd?
In the dictionary, a crowd is a gathering of individuals but that is not the definition we are looking for.
A psychological crowd is formed when
1) the sentiments and ideas of all the people in the gathering takes one and the same direction, and
2) their individual personality disappears.
In this definition behaving with the crowd is not dependent on the number of people. An isolated individual who displays those characteristics is a member of the crowd.
Your actions doesn't determine whether you are with or against the crowd.
So if you merely buying when everyone is selling or selling when everyone else is buying, you are part of the crowd. Your actions may coincide with what true contrarians are doing, but your basis for acting are totally different.
The psychological crowd is emotional and acting rationally puts you against the crowd.
Being against the crowd means to recognize crowd behavior, resist crowd influence and act after reasoning, deliberation and analysis. Even if you buy when the crowd is buying (after due diligence that the price is still lower than intrinsic value), you are acting against the crowd.
If you, like me, have lost a sizable amount of net worth (over $20,000 for me) last week, you might have felt the urge to pull out of the market. You might feel upset, angry and depressed. You might have went to read on various bloggers and post and selectively acknowledge why and how the bear market is here, and set to get worst. After which, you feel vindicated for selling everything. That, my friend, is a crowd trade.
On the other hand: Warren Buffett bought a stock and you followed him? If you didn't do your own diligence, analysis and reasoning, that is a crowd trade too.