Countertrend Strategy

Countertrend Strategy

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Updated: Aug 24, 2022
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A simple combination results in an excellent countertrend trading strategy:

  • Clear support/resistance level on daily charts.
  • A reversal Japanese candlestick pattern, for example a hammer candlestick at said support level.
  • A previous bearish/bullish rally (already announcing a correction).

Combine this very simple and the result will be a short-term entry looking to capture a bit of the price correction. It was what happened to us with the Australian dollar (in the AUD/USD pair) and that it met all the necessary requirements for fast and efficient trading. As you can see in the attached real account, we made 2 entries where the first one was looking to get out of the market quickly and get about 60 or 80 pips ; while the second block of lots (half the previous risk) would look for 140 to 160 points. Don’t forget to respect the main trend, that’s why I recommend using this Countertrend System “for short-term only” , and not to expect spectacular price rebounds since at any moment the pair could resume its original trend.

Ejemplo contratendencia en AUD/USD

As can be seen in the red rectangle, both entries have already closed favorably with the objectives achieved and it shows that short-term trading can be done using daily charts . You can read more about this simple strategy in part 1 and 2 posted earlier. This is the trade that I like to do, without stress and relying on the probability of my strategy, which in the end is the only thing that counts. Do not operate to operate, trading is a matter of discipline and criteria. Only then will they understand how financial markets work.


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James Knight
Editor of Education
James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.

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2. Roller Coaster
3. Stop Loss Strategy
4. Pisco Sour Strategy
5. European Open Strategy
8. News Trading Strategy
9. FX Trading with CFDs
10. MACD Strategy
11. Countertrend Strategy
a. Countertrend Strategy
12. Martingale
13. Soldiers Strategy
15. Trendline Strategy

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