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Originally Posted by johanno
You have to customize the counter trend system for every currency but seems easy to apply.
However it´s not a secret countertrend systems are very very dangerous so be carefull. have in mind another thing: seems this was not designed for forex. I explored counter trend systems several months ago and found eventually forex volatility explode this way of trade.
As usual we have to make a lot of backtesting.
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Well what you've said may be true because it's definitely more "tricky" to trade against the trend but I think you can win more often.
For example:
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
Licensed Brokers
Counter-Trend Trading
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