Counter Trend Trading?

[legendkiller420 10]

Hello Everyone,

 

Can anyone explain what does Counter trend trading mean?

[pa18 10]

Have you asked yourself what is trend trading?

 

Once you do then I'm sure that you know what is counter trend trading.

 

Unless that wasn't your question???

[ole 10]

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.

[Tams 20]

Hello Everyone,

 

Can anyone explain what does Counter trend trading mean?

 

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

[MightyMouse 12]

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

 

You'd rather have hamburger at a higher price than steak.

[onesmith 10]

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 January 1, 2012 by onesmith

[TheDude 10]

You'd rather have hamburger at a higher price than steak.

 

 

....and without cheese and pickles.

[Tams 20]

....and without cheese and pickles.

 

but with extra hot chilli sauce.

[TheDude 10]

but with extra hot chilli sauce.

 

and no beer to wash it down with

[TimRacette 11]

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).

[TheDude 10]

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.

[TimRacette 11]

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!

[onesmith 10]

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).

[TheDude 10]

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......

[Perrin 10]

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 November 3, 2012 by Perrin

[BlueHorseshoe 10]

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

[Perrin 10]

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

[BlueHorseshoe 10]

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