on the chart, which alerts us that a counter trend might emerge. In this article, we will examine the 5 steps for trading counter trends, which consists of impulsive and corrective price moves. If we take a closer look we will see that some markets did well on long but not short. To trade a counter trend price move you can simply follow these 5 steps: Find an opposite candle during an impulse move. If you are able to identify this price action, you will be able to locate counter trend moves on any price chart. This is shown with the red horizontal lines on the image.
In this article, we will cover 5 steps for trading counter trend m oves.
By following these simple rules, you will be able to identify the pattern.
While most traders will acknowledge that trading in the direction of the longer term trend is the higher probability way of trading, there are some.
I needed to add either a pure range trading system or a counter tre nd trading system.
The latter is called averaging down. This is the hardest step of the 5 step approach for trading counter trend moves. . However, the bullish signal is even stronger since the price action found support at the 161.8 Fibonacci level. You then apply the rules from the 5 steps discussed above. Here is an example to illustrate this point: You are long ERU/USD, with 1 standard lot from.0500, expecting it to go.1200. The Fibonacci retracement is a useful tool for counter trend trading.