COUNTER TREND Strategy [Forex & Crypto]

In a downtrend, buying from a Counter-Trend [Forex & Crypto] becomes effective if the price on the chart passes it from the bottom up.

While fixing a close in the selected time interval above the trend line.

Buy off the Countertrend

Events for this option very often happen as follows: first, the price passes through the trend line, is fixed higher, and during the corrective movement, they fall to it from top to bottom. At the same time, support is now appearing on the trend line, which used to play the role of resistance. It is on this support line that one of the most profitable points for concluding a buy deal is located (see Fig. 1).

Picture 1.

Additional confirmation can be obtained by measuring the depth of the corrective movement using Fibo levels (for examples of combinations with Fibonacci levels, see the examples at the end of the forex strategy). With this strategy, you can weed out false moves that create the illusion of a change in the prevailing trend, and at the same time understand whether you need to enter into a buy trade on the trend line or it is better to wait until the picture becomes clearer.

Selling off the Counter Trend

Making a sell deal from a counter-trend, which previously worked as an uptrend and at the same time played the role of a support line, and after the price broke it down, now turning it into resistance, is a fairly logical move. This way of trading has a great effect and is a very effective way to enter the market to sell (see Fig. 2).

Figure 2.

Again, the same Fibonacci levels can give us confirmation of the effectiveness of the breakout. If an upward price trend turns into resistance, and there are levels of corrective movement next to it, then the chances for a successful conclusion of a sell transaction increase dramatically. In case of making a mistake, there is always an opportunity to exit the trade without significant losses, because the market very often revolves around the breakout point of the trend for a certain time before deciding where to move next.

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