Trend trading vs counter trend trading. What type of trader are you?
I would like to discuss these two different type of trading styles. Some of you may be a trend trader while others do well at counter trend trading.
I personally find trend trading alot easier than countertrend trading. But this is a matter of trader preference. I have seen some unbelievably skilled countertrend traders.
Each style requires a different set of rules. Trend trading rules are simpler compared to counter trend trading rules. Buying a pullback or shorting a rally are the basic rules for trend trading. Buying a pullback to the 21 moving average is another example.
I am curious to know what kind of methods traders use in
counter trend trading. From my experience this requires a more stricter set of rules. I would like to start with one of my own.
- In a downtrend, I like to watch for a shift in market sentiment. A new TICK high is a good clue that I look for. I will then try to enter on a pullback of the TICK... vice versa for an uptrend.
- In a downtrend, I like to watch for extreme TRIN readings of above 1.9-2.0. The markets have a tendency to bounce. (works better in the overnight session)
Does anyone else have any rules that they live by? Would love to hear your comments on this. Thanks