Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

Recommended Posts

Hello Everyone,

 

Can anyone explain what does Counter trend trading mean?

 

You have to understand what is meant by a trend. Google and you will find many websites that discuss what a trend is and how to determine if a trend is in place. Then you can trade with or against (counter trend) the trend.

Share this post


Link to post
Share on other sites
Hello Everyone,

 

Can anyone explain what does Counter trend trading mean?

 

that means you would rather have hamburger when you could have steak.

Share this post


Link to post
Share on other sites

It means understanding trend well enough to trade both directions. With the trend and against the trend.

 

Hello Everyone,

 

Can anyone explain what does Counter trend trading mean?

Edited by onesmith

Share this post


Link to post
Share on other sites

I look for a low or high on the NYSE tick to correspond with a low or high in price on the index like the ES. If that low or high price hold's, that could potentially be the low or high of the day so I look to go long at low ticks with low price and short and high ticks with low price. That's an example of one of my counter trend setups because we're moving higher (uptrend) get a high tick of day at high price when I take a short (against the trend).

Share this post


Link to post
Share on other sites

counter trend trading is a dumb concept.

 

it implies there is a trend. therefore, why would anyone want to fade it? (unless your business is scalping - in which case one wouldnt be asking the question as such a trend would be almost irrelevant)

 

lets go back to hamburgers and steak - its more intellectual.

Share this post


Link to post
Share on other sites

Tim,

 

I tried your suggestion about the tick because I've made a lot of changes since the last time I looked at it. To summarize, initially it seemed to add something I liked but I soon realized it gave me many false signals. If you want to elaborate, I'm interested in hearing more about it's nuances, or other concepts.

 

If you make it good I'm sure TheDude and everyone else will be ok with it.

 

Thanks!

 

I look for a low or high on the NYSE tick to correspond with a low or high in price on the index like the ES. If that low or high price hold's, that could potentially be the low or high of the day so I look to go long at low ticks with low price and short and high ticks with low price. That's an example of one of my counter trend setups because we're moving higher (uptrend) get a high tick of day at high price when I take a short (against the trend).

Share this post


Link to post
Share on other sites
Haha, fair enough 'Dude' to each his own. I prefer mine inserted with a slice of herb butter with some grilled bacon and onions. Buffalo meat is ideal!

 

 

 

Awwwwwwwwwwwesome!

 

Ive never tried the herb butter thing but it sounds great.

 

when im in the usa, i like going to '5 Guys' Not the best burgers in the world, but pretty good - i like the concept and the peanuts.

 

BBQ sauce is a must for the Dude on a burger. Bacon is a treat if Ive been eating too much salad. Onions - well of course. grilled though - or even better onion rings deep fried in bread crumbs/batter.hmmmmmmm hamburgers......

Share this post


Link to post
Share on other sites

All this stuff about hamburgers and steak. Thankfully, I'm a vegetarian.

 

(despite my avatar indicating otherwise!)

 

Hello. My name's Perrin and I'm a counter-trend-trading-aholic.

 

At least, I think I am. Sometimes I am. Sometimes going with the flow is the way to go. I guess it just depends on the situation as I read it in front of me. The way I do things at the moment is swing trading over days / weeks.

 

Is everyone here unanimous in suggesting that trading against the trend is a bad idea? I'm sitting here with just over a year of live trading experience. On this thread TL members who I respect and have learnt from, are saying that trading against the current movement of the market is a bad idea. Am I going to blow up sometime by going against the crowd?

 

I've been reading more about Niederhoffer and his blow ups. Sucess, sucess, sucess, sucess.... then boom, loses everything.

 

Not that I'm all successes and peaches and cream (no steak of course). But I feel like consistant success is certainly possible.

 

Regarding counter trend trading - surely it depends at which point you are at during the trend. If there's a point where price has got tired and is looking to reverse, and you 'know' it's going to reverse (ignoring for the moment how it is that you know), surely you want to go against the crowd. The crowd has sold all their stock (for example) and no one else is left to sell (no one else wants to sell), so the only way for price to go is up (well, or sideways. Or down if you're wrong!).

 

Also price tends to go counter-trend quite rapidly. Sometimes.

Edited by Perrin

Share this post


Link to post
Share on other sites
All this stuff about hamburgers and steak. Thankfully, I'm a vegetarian.

 

(despite my avatar indicating otherwise!)

 

Hello. My name's Perrin and I'm a counter-trend-trading-aholic.

 

At least, I think I am. Sometimes I am. Sometimes going with the flow is the way to go. I guess it just depends on the situation as I read it in front of me. The way I do things at the moment is swing trading over days / weeks.

 

Is everyone here unanimous in suggesting that trading against the trend is a bad idea? I'm sitting here with just over a year of live trading experience. On this thread TL members who I respect and have learnt from, are saying that trading against the current movement of the market is a bad idea. Am I going to blow up sometime by going against the crowd?

 

I've been reading more about Niederhoffer and his blow ups. Sucess, sucess, sucess, sucess.... then boom, loses everything.

 

Not that I'm all successes and peaches and cream (no steak of course). But I feel like consistant success is certainly possible.

 

Regarding counter trend trading - surely it depends at which point you are at during the trend. If there's a point where price has got tired and is looking to reverse, and you 'know' it's going to reverse (ignoring for the moment how it is that you know), surely you want to go against the crowd. The crowd has sold all their stock (for example) and no one else is left to sell (no one else wants to sell), so the only way for price to go is up (well, or sideways. Or down if you're wrong!).

 

Also price tends to go counter-trend quite rapidly. Sometimes.

 

I base everything I do or investigate on the concept of fading the shorter term trend in favour of the longer term trend. On a shorter timeframe chart it would look counter-trend, and on a longer timeframe chart it would look like 'buying a pullback' in a trend. It's all pretty relative really.

 

There is someone in one of the Market Wizards books who is fiercely counter-trend - might be some help to you, but I forget which trader (could possibly be Tudor-Jones?). He is fairly 'global-macro' in style though.

 

BlueHorseshoe

Share this post


Link to post
Share on other sites

So the way you view it is you're counter trend, but only on the current timeframe. On the longer timeframe you are following the trend.

 

I don't use the higher timeframes as well as perhaps I should. I know there's another thread currently going on the topic of multiple time frames. When I started trading with real money I did various things, but mainly began by looking at mulitple time frames (having the 5 year chart open, and the 1 year chart). I have recently lapsed (lapsed? progressed? regressed?) into only reading the 3 month one (sometimes also viewing the 1 year) and not paying so much attention to longer term trends.

 

I could improve on getting better entries by being more selective. I will think about it, as I am sure that I can pick them better.

 

I do like the Paul Tudor Jones video :)

Share this post


Link to post
Share on other sites
So the way you view it is you're counter trend, but only on the current timeframe. On the longer timeframe you are following the trend.

 

Yes, although I have always identified the longer term trend from the shorter term timeframe, as there are more data points to work with there. On a daily chart, for instance, a 150 period MA would be the 'go with' trend, a 5 period MA would be the 'fade-able' trend.

 

This is workable in higher timeframes (if you have the capital), but I have never been able to make it work effectively in lower timeframes - the concept holds and is profitable, but the smaller profits get eaten up by commission and spreads.

 

BlueHorseshoe

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • also ... and barely on topic... Winners (always*) overpay. Buying the dips is a subscription to the belief that winners win by underpaying - when in actuality winners (inevitably/always*) win by overpaying... it’s amazing the percentage of traders who think winners win by underpaying ... “Winners (always*) overpay.” ...  One way to implement this ‘belief’ is to only reenter when prices have emphatically resumed the 'trend' .   (Fwiw, While “Winners (always*) overpay.” holds true in most endeavors (relationships, business, sports, etc...) - “Winners (always*) overpay.”  is especially true for auctions... continuous auctions included.)
    • re:  "Does it make sense to always buy the dips?  “Buy the dip.”  You hear this all the time in crypto investing trading speculation gambling. [zdo taking some liberties] It refers, of course, to buying more bitcoin (or digital assets) when they go down in price: when the price “dips.” Some people brag about “buying the dip," showing they know better than the crowd. Others “buy the dip” as an investment strategy: they’re getting a bargain. The problem is, buying the dip is a fallacy. You can’t buy the dip, because you can't see the total dip until much later. First, I’ll explain this in a way that will make it simple and obvious to you; then I’ll show you a better way of investing. You Only Know the Dip in Hindsight When people talk about “buying the dip,” what they’re really saying is, “I bought when the price was going down.” " ... example of a dip ... 
    • Date: 19th April 2024. Weekly Commodity Market Update: Oil Prices Correct and Supply Concerns Persist.   The ongoing developments in the Middle East sparked a wave of risk aversion and fueled supply concerns and investors headed for safety. Hopes for imminent rate cuts from the Federal Reserve diminish while attention is now turning towards the demand outlook. The Gold price hit a high of $2417.89 per ounce overnight. Sentiment has already calmed down again and bullion is trading at $2376.50 per ounce as haven flows ease. Oil prices initially moved higher as concern over escalating tensions with the WTI contract hit a session high of $85.508 per barrel overnight, before correcting to currently $81.45 per barrel. Oil Prices Under Pressure Amid Middle East Tensions Last week, commodity indexes showed little movement, with Oil prices undergoing a slight correction. Meanwhile, Gold reached yet another record high, mirroring the upward trend in cocoa prices. Once again today, USOil prices experienced a correction and has remained under pressure, retesting the 50-day EMA at $81.00 as we moving into the weekend. Hence, despite the Israel’s retaliatory strike on Iran, sentiments stabilized following reports suggesting a measured response aimed at avoiding further escalation. Brent crude futures witnessed a more than 4% leap, driven by concerns over potential disruptions to oil supplies in the Middle East, only to subsequently erase all gains. Similarly with USOIL, UKOIL hovers just below $87 per barrel, marginally below Thursday’s closing figures. Nevertheless, volatility is expected to continue in the market as several potential risks loom:   Disruption to the Strait of Hormuz: The possibility of Iran disrupting navigation through the vital shipping lane, is still in play. The Strait of Hormuz serves as the Persian Gulf’s primary route to international waters, with approximately 21 million barrels of oil passing through daily. Recent events, including Iran’s seizure of an Israel-linked container ship, underscore the geopolitical sensitivity of the region. Tougher Sanctions on Iran: Analysts speculate that the US may impose stricter sanctions on Iranian oil exports or intensify enforcement of existing restrictions. With global oil consumption reaching 102 million barrels per day, Iran’s production of 3.3 million barrels remains significant. Recent actions targeting Venezuelan oil highlight the potential for increased pressure on Iranian exports. OPEC Output Increases: Despite the desire for higher prices, OPEC members such as Saudi Arabia and Russia have constrained output in recent years. However, sustained crude prices above $100 per barrel could prompt concerns about demand and incentivize increased production. The OPEC may opt to boost oil output should tensions escalate further and prices surge. Ukraine Conflict: Amidst the focus on the Middle East, markets overlooking Russia’s actions in Ukraine. Potential retaliatory strikes by Kyiv on Russian oil infrastructure could impact exports, adding further complexity to global oil markets.   Technical Analysis USOIL is marking one of the steepest weekly declines witnessed this year after a brief period of consolidation. The breach below the pivotal support level of 84.00, coupled with the descent below the mid of the 4-month upchannel, signals a possible shift in market sentiment towards a bearish trend reversal. Adding to the bearish outlook are indications such as the downward slope in the RSI. However, the asset still hold above the 50-day EMA which coincides also with the mid of last year’s downleg, with key support zone at $80.00-$81.00. If it breaks this support zone, the focus may shift towards the 200-day EMA and 38.2% Fib. level at $77.60-$79.00. Conversely, a rejection of the $81 level and an upside potential could see the price returning back to $84.00. A break of the latter could trigger the attention back to the December’s resistance, situated around $86.60. A breakthrough above this level could ignite a stronger rally towards the $89.20-$90.00 zone. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HFM Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Michalis Efthymiou Market Analyst HMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past perfrmance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Date: 18th April 2024. Market News – Stock markets benefit from Dollar correction. Economic Indicators & Central Banks:   Technical buying, bargain hunting, and risk aversion helped Treasuries rally and unwind recent losses. Yields dropped from the recent 2024 highs. Asian stock markets strengthened, as the US Dollar corrected in the wake of comments from Japan’s currency chief Masato Kanda, who said G7 countries continue to stress that excessive swings and disorderly moves in the foreign exchange market were harmful for economies. US Stockpiles expanded to 10-month high. The data overshadowed the impact of geopolitical tensions in the Middle East as traders await Israel’s response to Iran’s unprecedented recent attack. President Joe Biden called for higher tariffs on imports of Chinese steel and aluminum.   Financial Markets Performance:   The USDIndex stumbled, falling to 105.66 at the end of the day from the intraday high of 106.48. It lost ground against most of its G10 peers. There wasn’t much on the calendar to provide new direction. USDJPY lows retesting the 154 bottom! NOT an intervention yet. BoJ/MoF USDJPY intervention happens when there is more than 100+ pip move in seconds, not 50 pips. USOIL slumped by 3% near $82, as US crude inventories rose by 2.7 million barrels last week, hitting the highest level since last June, while gauges of fuel demand declined. Gold strengthened as the dollar weakened and bullion is trading at $2378.44 per ounce. Market Trends:   Wall Street closed in the red after opening with small corrective gains. The NASDAQ underperformed, slumping -1.15%, with the S&P500 -0.58% lower, while the Dow lost -0.12. The Nikkei closed 0.2% higher, the Hang Seng gained more than 1. European and US futures are finding buyers. A gauge of global chip stocks and AI bellwether Nvidia Corp. have both fallen into a technical correction. The TMSC reported its first profit rise in a year, after strong AI demand revived growth at the world’s biggest contract chipmaker. The main chipmaker to Apple Inc. and Nvidia Corp. recorded a 9% rise in net income, beating estimates. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HFM Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Andria Pichidi Market Analyst HFMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Date: 17th April 2024. Market News – Appetite for risk-taking remains weak. Economic Indicators & Central Banks:   Stocks, Treasury yields and US Dollar stay firmed. Fed Chair Powell added to the recent sell off. His slightly more hawkish tone further priced out chances for any imminent action and the timing of a cut was pushed out further. He suggested if higher inflation does persist, the Fed will hold rates steady “for as long as needed.” Implied Fed Fund: There remains no real chance for a move on May 1 and at their intraday highs the June implied funds rate future showed only 5 bps, while July reflected only 10 bps. And a full 25 bps was not priced in until November, with 38 bps in cuts seen for 2024. US & EU Economies Diverging: Lagarde says ECB is moving toward rate cuts – if there are no major shocks. UK March CPI inflation falls less than expected. Output price inflation has started to nudge higher, despite another decline in input prices. Together with yesterday’s higher than expected wage numbers, the data will add to the arguments of the hawks at the BoE, which remain very reluctant to contemplate rate cuts. Canada CPI rose 0.6% in March, double the 0.3% February increase BUT core eased. The doors are still open for a possible cut at the next BoC meeting on June 5. IMF revised up its global growth forecast for 2024 with inflation easing, in its new World Economic Outlook. This is consistent with a global soft landing, according to the report. Financial Markets Performance:   USDJPY also inched up to 154.67 on expectations the BoJ will remain accommodative and as the market challenges a perceived 155 red line for MoF intervention. USOIL prices slipped -0.15% to $84.20 per barrel. Gold rose 0.24% to $2389.11 per ounce, a new record closing high as geopolitical risks overshadowed the impacts of rising rates and the stronger dollar. Market Trends:   Wall Street waffled either side of unchanged on the day amid dimming rate cut potential, rising yields, and earnings. The major indexes closed mixed with the Dow up 0.17%, while the S&P500 and NASDAQ lost -0.21% and -0.12%, respectively. Asian stock markets mostly corrected again, with Japanese bourses underperforming and the Nikkei down -1.3%. Mainland China bourses were a notable exception and the CSI 300 rallied 1.4%, but the MSCI Asia Pacific index came close to erasing the gains for this year. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HFM Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Andria Pichidi Market Analyst HFMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.vvvvvvv
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.