Counter trend trading strategies

Confirm a reversal candlestick pattern, or another opposite candle.
Table of contents

When the Aroon up line is close to the level, and the Aroon down line is close to the 0 level, then the market is in a strong bullish trend. So, the ideal place to hide your protective stop loss in an uptrend is below the most recent higher low swing point. A technical break below the most recent swing low is a warning sign that the market is starting to develop lower lows. This is a break in the previous price structure.

We know that lower lows are found in downtrends.

Very ACCURATE Counter Trend Trading METHOD

When the Aroon Up crosses below the Aroon Down we like to take profit and liquidate our positions. Get into the mind of the most successful traders and Hedge fund managers by checking the Top Trading Quotes of all Time — Learn to Trade. Top market wizard Ed Seykota is the father of computerized trend following systems and one of the best traders of our times. He acknowledges that in order to be great at this game you also need to identify counter trend moves. If your answer is: a price move, usually smaller in nature, that is opposite to the prevailing trend, is a counter trend move.

Because a counter trend move will usually generate a small amount of pips we need to get in as close as possible from the very start of the counter trend move. No matter if you use trend trading vs. With proper money management, all trend trading strategies have the potential to grow your Forex account relatively fast. The real secret to trend trade successfully is to not close your trade too early. Make sure your trend trade is generating at least a risk to reward ratio.

In the currency market, due to the economic forces at work we can see trends being more prevalent.

Tricks with Counter Trend Forex Trading Strategies

The long-term trends can last anywhere from a couple of months and can extend into year-long trends. But, most retail traders are only short-term oriented. We specialize in teaching traders of all skill levels how to trade stocks, options, forex, cryptocurrencies, commodities, and more. Our mission is to address the lack of good information for market traders and to simplify trading education by giving readers a detailed plan with step-by-step rules to follow.

Forex Trading for Beginners. Shooting Star Candle Strategy. Swing Trading Strategies That Work. Generally, traders do not seek to make any gains with this type of trend, unless they are analysing extremely short-term price movements, such as in a scalping strategy, for example. Users of our platform can also trade CFDs , which work in a similar manner and enable traders to buy or sell a number of units for an instrument, depending on the direction of the price.

You can spread bet and trade CFDs by opening an account with us. It is important to understand the risks of trading with derivatives, such as recognising that a trade position can result in gaining profit as much as a loss occurring if a trade does not go the intended way. Read more about leveraged trading for further understanding. A particularly useful technical analysis tool on our platform is the ability to create trendlines.

I. Trading Strategy

Traders can take advantage of customisable charts and drawing tools to highlight the price action and overall direction of a trend, which can be applied to multiple chart time frames. These features enable traders to take the quality of their analysis to an even higher level. Trend following techniques can be used for strategies that concentrate on either short-term or long-term trends. There are a variety of popular strategies that intraday traders like to use, such as scalping, and there are also separate intraday trend following strategies. Intraday trend traders would usually hold positions until the end of each day.

ORBP Counter-Trend | Trading Strategy (Filter & Exit)

Therefore, day traders can analyse trends that are only active for a short time period within the day, even for a few minutes or hours. Intraday trend following consists of analysing the shorter-term fluctuations and movements in price. For example, if there is an uptrend during the day that consists of a series of movements creating higher relative highs and lows, then traders could place a trailing stop before the low and then at the next higher low, in the trend, in case the trend were to suddenly reverse.

When following a downtrend, intraday trend following could be beneficial as this involves a short selling strategy, which is often used by short-term traders. Long-term trend trading involves holding on to a position for longer periods of time, often that is in an uptrend. This could be a few weeks, months, or even years. Long-term traders make decisions based on in-depth fundamental analysis that predominantly focuses on how the market will look in the future.

When it comes to trend analysis, long-term traders are less concerned with the daily trend fluctuations and concentrate more on the longer-term trend and its influential factors. This trading method enables trend traders to buy and hold a position for extended periods of time.

Counter Trend Strategy | Based on Bollinger Bands and the RSI Oscillator

Without concerning themselves with shorter-term trend movements, the focus is on the long-term objective. However, if short-term fluctuations potentially influence the long-term outlook of their position, then trend following is important and plays a significant role in attempting to attain long-term gains. When developing trend trading strategies, traders can benefit from a wide range of technical indicators.


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Below are a few examples of indicators that are popular amongst trend traders and can be applied to trading charts. Seamlessly open and close trades, track your progress and set up alerts. In a scenario when a price trend shifts from an upward to a downward direction, or vice-versa, it is called a trend reversal.

Traders can seek to gain from this by attempting to get out of positions before the shift manifests, or as early as possible if the movement has already begun. Counter-trend trading is a technique that traders use in order to predict a trend reversal and subsequently trade against the current trend. This trading method entails the analysis of trend patterns and purchasing or selling an asset that has faced a bullish or bearish shift. This is done in the hope that the trader would be able to buy or sell it back at an advantageous price, due to a higher or lower trend shift.

Traders who utilise the counter-trend strategy tend to recognise the benefit of smaller gains and understand how to prevent losses if their trend expectations do not actualise. In summary, trend following is a popular approach in trading that can be practised with both short and long-term strategies. After you master the trend with proper training, you will also be able to spot changes in the trend direction. As a bonus, we're also going to reveal some secrets to successfully counter trend trade. If this is your first time on our website, our team at Trading Strategy Guides welcomes you.

Make sure you hit the subscribe button so you get your Free Trading Strategy sent every week to your inbox. Identifying a trend after the fact is easy. Michael Covel a bestselling author is the biggest proponent of trading with the trend.

When the predominant price move is showing a particular direction, either up or down, that is called a trend. The standard definition of a trend, according to the Dow theory is a series of higher highs followed by a series of higher lows which defines an uptrend. Conversely, a series of lower lows followed by a series of lower highs defines a downtrend. If you want to learn how to invest in stocks, or how to trade Forex , you need to have these skills to detect the trend direction.

No matter of your preferred time frame you need a trend to be put in motion if you want to make a profit. Trading with the trend gives you the advantage of eliminating some of the flaws that inherently all trading strategies have. Please notice the difference of the available pips when trading with the trend compared when you go against the trend.


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    • In the technical analysis field, trend indicators are tools designed to help you see the general direction of the market. These technical indicators can help you filter and confirm buy and sell trend signals. Trend indicators are good at eliminating market noise and give us a better picture of the market trend.