Forex Strategies Counter Trend Trading

Forex strategies shown here would be incomplete if I did not add an article on counter trend trading or should I say in simpler terms “trading against the trend”.

Trading counter trend is basically trading against the major trend.

Why would a trader want to trade counter trend? is this not against most Forex strategies?... No simply because the markets can and do move counter trend, knowing how and when to catch these moves is an art on its own!

Do I trade counter trend…sure I do, only when the opportunity presents itself… the video below demonstrates my technique.

The video above is a shortened version, and not a detailed one and though not shown, one thing to always be aware of, is that you must never drop your guard, apply all the necessary trading techniques and methods shown on this site, and just to repeat, important ones being a touch or spike to the Bollinger bands, the 8ma and the 20ma cross and stacking up in the correct order, SAR must be visible and the RSI must be in the correct territory etc.

So what exactly is the order of trading this method you ask?

As shown in the video, you first need to locate the position of the 200ma on a higher time frame and plot this so it appears on the lower trading time frame… (the local 200ma should be ignored on the lower time frame) there is no hard and fast rule here if the plotted 200ma is way off course from the price then it is reasonably safe to go countertrend subject to strictly applying my trading methods with a trailing stop loss.

When the price and 200 moving average drift apart, sooner or later this condition is corrected and the two catch up, hence the counter trend moves.

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