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[RizkInvestments]

Who here thinks counter-trend trading is more likely to succeed and why?

Kal

[Trevman]

funny you should post this 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

[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.

[RizkInvestments]

Originally Posted by Trevman

funny you should post this 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

Interesting stuff. Personally I don't use this but I may do some backtesting.

Thanks for the post,
Kal

[RizkInvestments]

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.

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