Hi all. My name is Alexander, I trade on the Forex market and at the same time I am the author of a website where I post everything that interests me in trading.

Lately, I have been persistently analyzing trends, trend movements, trading options based on trends, in general, you understand, I am interested in everything related to trends. To date, enough information has accumulated so that I can tell you how to trade with the trend correctly.

Is trend really your friend?

Trend is your friend, which means trend is your friend. I don’t think there is a trader who is not familiar with this saying. You don't need to be an expert to understand the essence of these words.

Trend is your friend or the trend is your friend, literally means, trade with the trend and you will make a profit. But behind these words lies a threat that experienced traders, of course, know about, but beginners are usually not told about.

In principle, the logic is clear, if there is a strong trend in the market, then no matter where you jump in, even if there is a drawdown, the trend will still play its main role and pull the position into the plus.

Let's quickly look at an example:

There are two upward trends in the EURUSD pair:

• uptrend on a higher timeframe;
• an uptrend on a lower timeframe.

Both trend lines, with a small error, reach a point where, according to all the rules, it is possible to make a purchase. Will this purchase be justified? From a trend point of view, of course. Moreover, remembering the rule Trend is your friend, you shouldn’t be afraid at all, because even visually it is clear that the trend is upward.

But, if everything were that simple, no one would know about the crying, bankrupt traders. Everyone would be millionaires.

After opening a purchase in the place indicated by the red circle, the price continued to fall and never returned. It turns out that not everything is so simple. It’s not enough to be able to correctly determine the direction of a trend; do you need to know something else?

5 important points before trading with the trend

Rule 1. Each timeframe has its own trend

There are 9 main timeframes:

• M1 - minute timeframe;
• M5 - five minute timeframe;
• M15 - fifteen minute timeframe;
• M30 - thirty minute timeframe;
• H1 - hourly timeframe;
• H4 - four hour timeframe;
• D1 - daily timeframe;
• W1 - weekly timeframe;
• MN - monthly timeframe.

Each chart lives its own life. There may be an upward trend on H1, and a downward trend on M5.

Comparing one timeframe with another can both help in trading (there are a lot of trading strategies, the most popular of which is Elder’s Three Screens), and interfere and confuse.

My advice: if you are already experienced and understand what you are doing, then analyze the chart on all timeframes; if you are a beginner and do not feel enough knowledge, I advise you to choose one TF and analyze the charts without switching from it.

Rule 2. Trading with the trend for disciplined traders

Firstly, no matter what anyone says, trading is not the easiest thing to do. The trader is under constant stress, good if it is controlled, and much worse if uncontrolled.

Remember yourself, at the moment when you need to open a deal, two completely different people wake up in you: one says it’s time to open a deal, the second dissuades you and provokes you to wait until there is a clearer picture.

When trading with a trend, discipline must be paramount. There's a deal, open it. There is no time to wait for an improved situation. It's either now or never. If you delay a little, the risk/reward ratio will change its value, after which it will not be profitable to risk money.

Secondly, trading with a trend implies a wait-and-see nature. There will be no scalper entries, and patterns for entering a trade will not appear every 5 minutes.

Trading with a trend implies the tactic: “Open a deal, hold it!” You cannot take 10 points and leave the position, because the next one will not be soon.

Keep your will, if the strategy says you have to hold it, then you have to hold it. Thoughts like: “And this is enough for me” are not allowed. You can take too little profit, which is not enough to live on, but in the next transaction, you can pay for the stop loss with these points.

Rule 3. Trade what you see, not what you hear.

A very important rule that applies not only to trend trading, but also to all other methods. You don't have to go far. I wake up today, take the children to the garden, sit and have breakfast and watch financial news on TV.

"The EURUSD pair has finally entered its upward trend and this will last for a long time. The trend has been formed, there cannot be two opinions here." And so on and so forth.

I open the chart of the EURUSD pair, and see that a sell position is taking hold.

Did the TV analyst deceive you? Don't think. Our positions are simply too different. He looks at the charts more globally and analyzes where the price might be in a month or two. He doesn’t say how much the pair can sag; the final mark is important to him.

Well, if it doesn’t reach the analyzed price, there are a lot of other reasons why this happened. The fact remains that a television analyst, unlike you, does not risk anything. We chatted and ran away.

Therefore, under no circumstances listen to ANYONE. Trading is an intimate matter. Develop your strategy and analyze the chart yourself. Since you learned how to build a trend, perhaps no one knows how to build, and if so, you should only be interested in your signals.

Rule 4. Diversification in the Forex market

Most likely, I will attribute this rule to beginners, although sometimes it would be nice for me to listen to it myself.

I don’t think there’s any need to explain what diversification is, but if you don’t know, refer to Wikipedia. Diversification is good for portfolio trading. Take a little of this, a little of that. Some will lose money, some will make money. Ultimately there must be a plus.

I'm not talking about much else here. You should not trade all strategies at the same time. If you decide to trade with the trend, ignore other strategies.

Professionals have been practicing the same input for years and do not focus their attention on another. And it is right. If some pattern is clearly understood, tested, you know all the tricks it can teach, and besides, it brings money, so why use anything else?

The idea behind this rule is that if you decide to trade with the trend, keep hammering away at this topic until you’re blue in the face. Explore it from all sides. Achieve such a level of skill that there will be no surprises for you when opening the next trade.

Rule 5. Measure twice, cut once

This rule suggests itself. There's never any need to rush. The market was yesterday, is today and will be tomorrow. And your deposit was there yesterday, is there today, but tomorrow it may no longer exist.

Previously, I neglected this rule and kept everything in my head. But after reading smart books on trader psychology, I came to the conclusion that it is best to draw up a point-by-point action plan. The position has come up, I open my plan and mark it point by point. For example, point 1, completed, point 2, completed, point 3..... and so on. If everything is correct, all points are met, I open a position.

Say: “Does it take too long to double-check all the points?”

Analyzing my transactions, I came to the conclusion that the market gives me about 2 - 3 minutes to think. This time, unless of course you pick your nose, is quite enough to make an informed decision according to the scheme proposed above.

Practical application of trend trading methods

To start trend trading on the Forex market or any other exchange, the first thing you need to do is determine the trend. As mentioned above, there are only two trends: an upward trend and a downward trend.

The easiest way to determine a market trend is to use trend lines, which are available in any trading terminal. If the trend line is directed upward, then there is an upward trend, if downward, then there is a downward trend.

In addition, indicators can come to the aid of a trader. For example, the most common trend indicator is called Moving Average. Depending on the direction in which we look at the indicator, we determine the presence of a trend.

The logic is the same as with trend lines: if the indicator looks down, then we are dealing with a downward trend, if up, then with an uptrend.

Let's understand in practice how to trade with the trend using popular methods.

How to trade the trend with specific lines

The trend line is a rather cunning tool. For all its simplicity, it would seem that a line is just a line; it can be laid in completely different ways and, accordingly, get completely different results.

To ensure that the result is always the same, I suggest studying the article Trend Line | How to build trend lines and use them in Forex, in which I listed several popular ways to build a trend line. Learn the method you like and use only it. There will be less confusion.

The question remains, how to trade with the trend? Log in anywhere? It’s dangerous, it was written about above. So we need a smarter way.

You need to enter exclusively from the trend line or as close as possible to the trend line at the moment the price reacts to it. If you miss the moment, the price may run away and you will have to set a stop loss, which violates the principles of money management. What you shouldn't do at all.

Suppose we have identified a trend, we will figure out what to do next on the screen.

The screenshot shows an upward trend. When the price approached the trend line, a reaction appeared in the form of a Bullish Engulfing candlestick pattern. We enter along with the trend with a stop below Low.

For take, you can use different options. The most common is to postpone the trend at the highs, thereby obtaining a trading channel and close the deal at its upper border, or measure the waves.

Strategies for trend trading

There are a lot of trend strategies. Basically, they are all designed to enter the market by touch. For example, if we take a strategy based on moving averages, we will need to enter a position at the moment the price touches the indicator.

I prefer the strategy based on trend lines and I think the best strategy is called “Third Touch”.

How to trade with the trend. Early entry strategy.

A pattern for entering the market appears at the very beginning of an emerging trend, thereby increasing the potential of the transaction. I like early entries because it not only increases profits, but also significantly reduces losses.

To implement a purchase entry according to the strategy, you need:

1. Presence of a downward trend.
2. Breaking through the last local maximum.
3. Minimums should no longer be updated.
4. After breaking the high again, we draw a trend line.
5. We are waiting for the price to touch the trend line for the third time.

This strategy involves entering a trade using pending orders. StopLoss is set below point 2, takeprofit is calculated either by wavelength or using channels.

I hope everything is clear with early entry. We identify a trend and wait for it to be broken. At the first signs, we enter at the beginning of the emerging trend, and then, if everything was analyzed correctly, we make money; if an error crept into the calculations, we get a stop.

How to trade with the trend. Addition strategy.

There are cases when we are either late to enter at a better price or simply want to add to an existing position. It should be warned that this method is intended for more experienced traders who are able to compare information from different timeframes and not get confused in it.

The screenshot depicted the beginning of the trend. The example is not the most obvious. In this case, it turns out that we did not add to an existing position, but opened a new one, but I think the idea is clear.

After the main position is opened on the working TF, you should switch to the TF of the junior period and if there are similar conditions for entering a deal using the Third Touch strategy, add volume.

That's all for me. The information presented should show you how to correctly trade with the trend on Forex and any other market where you trade. Until new articles. I look forward to your comments.

From the article you will learn:

My warm greetings to everyone! In this article we will try to understand in more detail what the method of trading strategy against the trend consists of. Does it make sense and can it be implemented in practice? We will try to find the most comprehensive answer to these and many other questions in the context of this article.

We all know very well that the trend is our friend, and it is not recommended to enter positions against this very trend. But sometimes you can find quite strong corrections from the trend, on which you could make good money.

In fact, many traders, especially beginners, do not always understand what the counter-trend trading strategy is. It seems to them that such trading is simple, but it is all deceptive.

It's one thing when you look at a chart in history, but it feels completely different when trading directly in real time.

In this case, it is more important than ever to be able to find a very high-quality signal and timely jump into the market with a short stop.

Very often, trading against the dominant trend can bring serious losses, but sometimes you really want to be in a trade in order to get a potential profit. In general, I can’t recommend trading against the trend to novice traders, but if you have already decided to conduct such trading, then you need to learn how to do it correctly!

Get to the point

Now I will clearly show you why trading against the trend is very risky and often associated with serious losses.

We see that a downward trend is developing, and at the same time, I marked everyone’s favorite ones with pink arrows. As you know, this formation works best in market conditions, but what do we see in this case?

We had five fairly clear pin bars appear, but none of them worked out? And why? It’s simple - after all, we have a clear downward trend, and the price followed exactly this trend, knocking out everyone who suddenly unwisely decided to buy.

Roughly speaking, in this case, the trader would persistently open on each pin bar in the hope of catching a pullback, but the market would immediately knock him out with a new downward impulse. Ultimately, this would lead to very serious and tangible problems.

What is the problem

Why is everything happening like this? There is a certain psychological problem at the heart of all this, it’s just that when we look at historical data, our attention is immediately drawn to historical highs and lows.

That is, we see an established setup at an extreme that has worked, but at the same time we forget and don’t even think about what generally preceded the appearance of this very extreme.

But at the same time there is no need to confuse trading in a trend versus a flat when there is no directional movement, as here:

Here, roughly speaking, one could safely trade from level to level, pursuing small goals, and, if possible, setting . For what? The fact is that we never know when a flat will end and a trend will begin.

There may be a serious impulse that breaks the boundaries of consolidation, marking the beginning of a directional trend. In this case, it will be necessary to change trading tactics as a whole.

What should I do?

So, what exactly is the counter-trend trading strategy, in particular, if you are used to trading using .

We need to understand that what is more important to us is not the pattern itself, but the place where it was formed, and in the context of trading against the trend, we must pay even more attention to this aspect.

Where should we look for patterns! Of course, any educated setup must be based on a serious level, in particular, if we decide to trade against the trend, then we need to look for strong patterns that look very beautiful in appearance.

As for levels, in this case, I recommend that you look for levels from larger intervals, for example, if you are working on H1, look for levels from H4 or D1. Here's an example:

We have a clear upward trend, as evidenced by the abundant breaking of previous highs. Then, we observe that the price rests on the level from the daily interval; in addition, I marked with an arrow the appearance of an inside bar, which indicates the depletion of the bulls’ strength.

In this case, we could well have opened a sell trade; as you can see, the price has really moved down.

But here it was necessary to take into account the fact that the trend is still upward, accordingly, the sell transaction was counter-trend.

At the moment, it was necessary to pursue small goals to make a profit. Ideally, it was necessary to exit the market when the price reached the nearest level. Yes, the price moved further down, but we didn’t know in advance that everything would develop according to a similar scenario.

Look

Caution first

The method-strategy of trading against the trend is that here, more than ever, you need to be careful. If you are trading with a trend, you could still enter into a trade if there is a not very beautiful pattern, but when trading against the trend - for us this is already an unaffordable luxury.

As for beginners, this style of trading is generally contraindicated for them. The fact is that such an approach already implies that the trader has impressive experience, and the potential profitability of countertrend transactions is not so high.

For example, by trading with a trend, you can easily provide yourself with a mathematical expectation of 1k5 on average. But as for transactions against the trend, here the ratio already shifts 1k1, well, sometimes 1k1.5-2, and then only in a very good situation.

conclusions

To summarize, I would like to point out that at first glance, trading against the trend is a cakewalk, but once you try this style of trading, you will immediately change your mind.

Learn to competently trade in the direction of the global trend, and only then, as you gain experience and skills, use other styles.

Of course, corrections from the dominant trend can be quite global, but we have no way of knowing this in advance; accordingly, when trading in a similar style, always be prepared for the appearance of natural losses.

Probably all traders have heard the phrase “The trend is your friend” at some point, but, as a rule, most of the time the market is in a flat state, and only 20-30% of the time there is a pronounced trend in the market. What to do the rest of the time? Of course, if on the chart you can see with the naked eye an upward or downward trend with small pullbacks, which moves as if in a channel, starting from or, then you should open trades only along the trend. However, if there are strange zigzag movements in the market, then while you wait for a clear trend to form, you may lose your profit, since such movements can last for more than one month. In this case, you can trade cautiously against the main trend. There are several counter-trend strategies:

Trading on pullbacks. Strong trend movements are very often replaced by pullbacks, so they can also be used to make a profit. This usually happens after the release of important ones, when the price first rushes in the direction of the main trend, and then a correction occurs. This pattern is used by traders who trade on news. First, they open their trades in the direction of the main impulse of the economic event, and when the movement exhausts itself, they close positions and open new trades in the opposite direction, increasing their profits. Also, a correction is observed at the close and during the Asian session. If you are going to trade on pullbacks, you must remember that the size of the correction is always smaller than trend movements, so you should set minimum profit targets;

Scalper strategies. When trading using, any price movement must be considered to make a profit, including trading against the trend. Since the scalper uses small ones and the duration of transactions does not exceed 5-10 minutes, he can successfully trade both with and against the trend;

Trading in the channel. Sometimes the price moves upward or downward, starting from both its upper and lower boundaries. In this case, you can open both sell and buy positions, regardless of the direction of the main trend. The only thing that will differ is the size of take profits; in the direction of the trend it will be larger than on pullbacks;

Trading using oscillator indicators. You can also trade based on indicators such as . When the stochastic lines cross in the overbought zone, sell, and when the stochastic lines cross in the oversold zone, buy;

Finding turning points on the chart. Another type of trading against the trend is the search for reversal patterns on the chart, that is, the end of the current trend and the emergence of a new movement. In this case, you may find yourself at the origins of a new trend, which promises big profits. However, such setups happen extremely rarely, and entries against the trend can cause significant losses. To protect you from unjustified entries into trades that trigger stop losses, you must follow the recommendations, which you can learn about by reading our article to the end.

What to pay attention to when trading against the trend?

If you want your trading against the trend to be successful and profitable, then you need to pay attention to the following nuances:

Thus, you can trade against the trend, but only by following all the recommendations described above. Trading against the trend is a risky activity, so you should approach it wisely, having a sufficient amount of knowledge and practical skills behind you. If you are just starting your acquaintance with the Forex market, then we do not advise you to open trades against the trend, use in your trading, and also trade on candles with long tails, as described above.

In this article we will look at what the “Counter Trend” strategy is for binary options and Forex. Also here you will find tips on its use and settings.

Binary options trading strategies can be divided into two global subtypes - trend and counter-trend. By “trend,” binary experts understand the current price direction within a certain period of time. The trend can be upward, downward, or fluctuate in the area of ​​price values.

Increase

Popular online binary options platforms do not have all types of indicators described above. To accurately and completely display technical analysis, you need to use stand-alone software like Meta Trader 5.

Trading signals

Signals may indicate an imminent increase or decrease in the price of the pair. To display price fluctuations on the main screen, you need to use the "Japanese candlesticks" interface. For clarity, enable the display of the Moving Average and RSI indicators.

In a downward trend, a bearish bet should be placed when the RSI indicator is below the lower price limit. In this case, you need to “bull” and take a raise. The signal is also the magnitude of the one-time price change: in other words, the “size” of one candle. If the chart shows the sequential appearance of “long” candles in the same direction, then this indirectly indicates an imminent “rebound” of prices and the need to bet against the trend.

This strategy is convenient for novice traders, as it does not require deep knowledge of technical analysis and the Meta Trader 5 interface. To practice the basics of price forecasting, a trader can use the RSI indicator. At the same time, there is no need to enter into transactions for a too short period (1-5 minutes), since instant price jumps within a trend can be noticeable. In ultra-fast transactions, the degree of risk increases many times over.

If the RSI indicator displays oversold or overbought near the threshold values ​​("70" and "30" respectively), there is no need to rush and enter into a trade on the pair. It is better to wait for the moment when the RSI chart confidently crosses the conditional lines. It is better to use this indicator when working with currency pairs. When trading in commodities and cryptocurrencies, RSI can be misleading. For these types of pairs, it is better to use moving average and MACD markers, which will help predict price dynamics in the long term.

A brief algorithm for trading against the trend:

1. Find a suitable currency pair (it is best to consider binary options with minimal current changes. It is better for the pair to have several “long” unidirectional candles, rather than many “unsuited” short ones);
2. Determine the current trend by setting the time range (from up to an hour, if you plan to work using RSI. The simple moving average should be turned on by default);
3. Choose a trading strategy: anticipate corrections (the so-called “bounces” described above) or wait for the trend to change.