Hey traders,
This week has seen some looking pretty solid counter-trend price action Settings module. Most of these settings to no end of work because of the strength of the underlying trend. I thought it would be a good idea to use the price action this week as a lesson in trading against the trend because it is almost always a bad idea.First off, let me say that surely there are times when the markets counter-trend price action configurations they come out well, as this is just a result how natural ebb and flow. However, the fact is that there are so many crafts counter-trend more that don't work that Setup counter-trend on average have a very low probability of working more price action configurations with the trend. The fact that the Forex market is almost a pair of currencies trend, combined with the fact that the market is in General an infinite stream of opportunities, means that there's really no reason to take only ever a low probability of installing counter-strike trend.
Start Forex traders should be particularly cautious of crafts counter-trend, as it takes a very price action analyst expert in knowing which Setup counter-trend to take and who don't take. Counter-trend trading is something that you can add to your commercial tool box long after you have mastered the art and skill trading price action configurations with the dominant trend direction. Until you master trading with the trend, however, there is no reason to attempt trying to collect the tops and bottoms.
Example 1 – AUD/USD bearish trend fakey installing counter-strike since 9/17/10
Note the counter fakey-downward trend that occurred about a week ago the daily, this setting was formed quite well and would have been a trade attempted to take. However, operators who are eager to students of the market would have known that the Australian dollar is technically and fundamentally very strong now, so that there was no real reason for going short. many times counter-trend installations like this one are simply result from natural price dynamics;the markets don't move in straight lines and will often stall out for a few days before continuing on trend.
Note the inside bar Setup that formed just above the support around 0.9200 which ended up being an amazing Setup with a huge risk reward scenario. This is a clear example of why it makes more sense to wait only for installations with a tendency to confluent levels patently, rather than trying to stop a train of acceleration.
Example 2 – EUR/USD bearish counter-trend pin bar from 9/17/10
The EURUSD shot outside a setup of downward price action about a week ago who ended up never coming out downward. it is worth noting that if it did take this setting, but change the entry to slightly below the low of pin, never could've gotten filled. generally with configurations counter-trend is almost always better to leave the momentum of the market is entering trade. meaning, if you want to see the price of moving in the direction of your business counter-trend forecast by placing on a heading of stop just above the top or below the bottom of the Setup, rather than entering the market or limit order.
Note also the inside bar installation that was formed after the slash of internal bar pin. This could've been traded as a continuation of installing and plugged into a high break; This would have netted you some serious seeds. This graph is one more great example of how trading with the trend almost always wins over trading against the trend.
Price action trading trend is discussed in depth in my forex trading training course where very discuss in more detail just how to use the trend as a filter to select the best price action configurations.
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