CounterTrend Trading | Page 3 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Day Trading vs. Swing Trading vs. Position Trading 86 replies

Reversals vs. CounterTrend Trade 28 replies

CounterTrend Trading

  • #41
  • Edited 5:14am Oct 18, 2006 5:03am | Edited 5:14am
Quoting c1ro
What is counter trend trading actually???
It involves trading against the 'longer term' trend (what ever you define that to be). This may result in quicker profits because the counter-trend might be more explosive than the more obvious trend (for a range of technical and fundamental reasons, i.e bias where one curency is heavily short/long (leaving it exhausted), panic selling, automatic orders being filled, options etc). but the downside is that if the favorable move doesn’t occur, you could be trapped, and there is a smaller chance that you can rely on the longer term trend to bail you out later on.
  • #42
  • Oct 18, 2006 5:11am Oct 18, 2006 5:11am
Quoting syd360
it all comes down to this: can you consistently predict the market or not, the rest is just details.
Predicting is gambling, following is a different story.

It's better to be able to predict, but it's harder.
Try hard, think fast, die young
  • #43
  • Oct 18, 2006 5:37am Oct 18, 2006 5:37am
Quoting syd360
It involves trading against the 'longer term' trend (what ever you define that to be). This may result in quicker profits because the counter-trend might be more explosive than the more obvious trend (for a range of technical and fundamental reasons, i.e bias where one curency is heavily short/long (leaving it exhausted), panic selling, automatic orders being filled, options etc). but the downside is that if the favorable move doesn’t occur, you could be trapped, and there is a smaller chance that you can rely on the longer term trend to bail you out later on.
So, it can says that u will go long when everyone goes short????
  • #44
  • Oct 18, 2006 5:44am Oct 18, 2006 5:44am
Quoting dof
Predicting is gambling, following is a different story.

It's better to be able to predict, but it's harder.
Good point, maybe 'predict' wasnt the right word. Put it this way: I trade based on what i beleive (or 'predict') how everyone else will interpret the market. In other words, i couldnt care less where I PERSONALLY predict the economy is going to go (if im right or wrong, it doesnt matter), what matters is where everyone else predicts the econmy is going to go. Then i follow that money.

so i guess im 'following' the market. If i wasnt following the market, all my trades would be in the red.
  • #45
  • Oct 18, 2006 5:52am Oct 18, 2006 5:52am
Quoting c1ro
So, it can says that u will go long when everyone goes short????
technically incorrect: you go long AFTER everyones gone short (or vice versa). not a good idea to do it at the same time unless your asking for a margin call
  • #46
  • Oct 18, 2006 6:08am Oct 18, 2006 6:08am
Quoting syd360
technically incorrect: you go long AFTER everyones gone short (or vice versa). not a good idea to do it at the same time unless your asking for a margin call
Hmm.. but i think u must have a huge account to do that
  • #47
  • Oct 18, 2006 7:52am Oct 18, 2006 7:52am
Quoting c1ro
Hmm.. but i think u must have a huge account to do that
i wouldnt kno because i dont counter-trade
  • #48
  • Oct 18, 2006 8:02am Oct 18, 2006 8:02am
Quoting economicsrules
Hello all,

I just found this thread and decided to chime in. I only trade counter trend. Some may say it's dangerous but the truth is if everyone agreed there wouldn't be a market, right? Price action only moves for so long then it has to reverse. Timing... well that's called mutiple orders. I scale in and out of trades. I couldn't imagine placing all my money on 1 'bet', no matter what the trading style or market. It's much easier when you scale in. Many times the trade will go my way with a small lot and the profits could have been better. But that is a rule I have I stick to it. Many times I have saved my butt because I had a small trade going against me and then later put in another large order which cost averages me in and it's profitable.

Lots of practice too.

Thanks,
-Eco
Very similar to what I do, except I don't try to go against the trend in the first place. Averaging down/up positions just like dollar cost averaging stocks is a hugely important and not often discussed strategy. I have basically invented my own system for trading forex using position averaging.

I trade with the trend, but if it reverses or if I am wrong then I can always average myself out of it. Some people think its the same thing as martingale essentially since I am increasing my lots on a losing trade. Its really not like martingale at all. The beauty of this style is that it allows me to trade completely without s/l. The only time i even touch s/l is when i am already in the black on any given trade, not neccesarily my whole position. This is what I mean with my signature "manage the trade", since I can control where my average position price is by changing my commitment to a trend.
  • #49
  • Oct 18, 2006 8:06am Oct 18, 2006 8:06am
Quoting c1ro
Hmm.. but i think u must have a huge account to do that
I don't think so. I think you just need a good strategy how to do it. For instance, I like to play reversal trading using chart patterns, such as double top/bottom, 1-2-3 M top / W bottom and combine it with fundamental news, etc.
"Even the word impossible says that I M possible"
  • #50
  • Oct 18, 2006 8:50am Oct 18, 2006 8:50am
Quoting SkYliNe0511
I don't think so. I think you just need a good strategy how to do it. For instance, I like to play reversal trading using chart patterns, such as double top/bottom, 1-2-3 M top / W bottom and combine it with fundamental news, etc.
But I think U can't against the news when u try to make an entry right??
  • #51
  • Oct 18, 2006 5:08pm Oct 18, 2006 5:08pm
Quoting c1ro
But I think U can't against the news when u try to make an entry right??
Most of the times, yes.
"Even the word impossible says that I M possible"
  • #52
  • Edited 6:08am Oct 20, 2006 5:50am | Edited 6:08am
The move we have seen yesterday in EUR/USD is a perfect example of why some of us trade counter-trend.

As most would argue, the trend was obviously down for the past week or so. Most counter-trend traders were fading these moves (ie scaling out their orders and buying at the extremes) while most trend traders were looking to short any rallies. I am willing to bet that MANY trend traders shorted too early and hence initially lost during yesterdays move.

Now the question becomes - is the trend for EUR/USD up or down

There you have it.
I wish you the best of trading,
Kal
  • #53
  • Oct 20, 2006 7:20am Oct 20, 2006 7:20am
One might also argue that we are in a rangebound market (EURUSD) since mid-May and although range lows have been tested, they have not been broken. In that case, there isn't a trend so there can be no counter trend.

We haven't seen sustained volatilities this low since October 2002.

This is why people are getting away with doubling down, adding to their position every -10 pips, and not using stoplosses. As soon as the market moves, and it will, most of those who got careless will no longer be with us.
  • #54
  • Oct 20, 2006 7:47am Oct 20, 2006 7:47am
Phil, I know you have read Fooled By Randomness, by Teleb, I think we just have not seen the Black Swan fly for a while. Those who forget history are doomed to repeat it.

I agree with you on this. Scott


Quoting philmcgrew
One might also argue that we are in a rangebound market (EURUSD) since mid-May and although range lows have been tested, they have not been broken. In that case, there isn't a trend so there can be no counter trend.

We haven't seen sustained volatilities this low since October 2002.

This is why people are getting away with doubling down, adding to their position every -10 pips, and not using stoplosses. As soon as the market moves, and it will, most of those who got careless will no longer be with us.
  • #55
  • Oct 20, 2006 8:26am Oct 20, 2006 8:26am
In order to discus trend in this way, wouldn't you have to define trend specifically in time terms? One man's trend might be another man's momentum.
Profit is where readiness meets Opportunity
  • #56
  • Oct 20, 2006 8:52am Oct 20, 2006 8:52am
Quoting philmcgrew
One might also argue that we are in a rangebound market (EURUSD) since mid-May and although range lows have been tested, they have not been broken. In that case, there isn't a trend so there can be no counter trend.

We haven't seen sustained volatilities this low since October 2002.

This is why people are getting away with doubling down, adding to their position every -10 pips, and not using stoplosses. As soon as the market moves, and it will, most of those who got careless will no longer be with us.
Again, it's all comes down to what timeframe you are talking about.

What you refer to happens a few times a year for most. Check the message boards and you can usually tell when this has happened. Usually - as you said - it happens after people get too comfortable adding to losing positions without a stoploss.

Good luck,
Kal
  • #57
  • Oct 20, 2006 9:35pm Oct 20, 2006 9:35pm
Quoting smjones
...Those who forget history are doomed to repeat it.
Hey, nice quote!
  • #58
  • Oct 21, 2006 11:25am Oct 21, 2006 11:25am
"i was reading an interesting blog just yesterday on this http://newsletter.neoticker.com/?p=193 but whats also very interesting is http://newsletter.neoticker.com/?p=237"<!-- google_ad_section_end -->
  • #59
  • Last Post: Oct 21, 2006 3:31pm Oct 21, 2006 3:31pm
You can counter trade (1 min chart) if all you are looking for is a few pips
I'm only a bird in a gilded cage
1 trader viewing now