Trading against the trend.

Most recommendations talk about trading with the trend; this option is considered less risky and more promising.

But there is also trading against the trend, which, surprisingly, also brings good profits to some traders.

Trading against the trend - opening trades against the existing trend on a working or older time period.

There are several options for such trading, on the basis of which various Forex trading strategies are formed.

Trading on pullbacks.

Everyone knows that 60-70 percent of the time the price moves against its main direction, so to speak, against the trend.

This is due to the phenomenon of rollback or correction , which usually occurs after sharp trend movements.

Knowing this pattern, you can make quite successful transactions, the main thing is to correctly determine the entry point and close the order in time before moving along the trend.

Usually, a correction occurs after the release of strong news; more precisely, the news comes out first, then the trend makes a breakthrough, then a rollback occurs.

Many traders who trade on news use this pattern, first opening a trade in one direction, and after the start of a correction in the opposite direction, having previously closed the previous one.

Which significantly increases the profit margin. Trading on pullbacks is often used by scalpers, because the duration of their transactions rarely exceeds a few minutes, so with the right skill you can make money on any price movement.

Trading in the channel.

Another strategy in which you can open trades in both directions is trading in a channel; it is described in detail in the article “ Scalping in a price channel. ” To use it, you just need to build support and resistance lines and you can trade against the trend.

Often, for such trading, the stochastic indicator , transactions on which are opened depending on where the price is in the oversold zone or in the overbought zone, while ignoring the direction of the trend.

Despite the examples given, trading against the trend has always been and is more risky than the opposite option, so be especially careful when using it.