Countermove
Definition of 'Countermove'The movement of a security's price against the current trend. A countermove occurs soon after the original trend and in the opposite direction, but by a lesser amount. Countermoves allow investors to try to "buy low, sell high," by taking advantage of the price retreating along the current trend to obtain a better entrance.Also known as a retracement. |
|
Investopedia explains 'Countermove'Gains had by trading on countermoves are usually smaller because the full market swings are not recognized. Risk of loss is also high because traders often mistake a reversal for a countermove or retracement. For this reason, having a stop-loss in place is imperative.For example, if the stock price moves up $15 and stays around the new level, it is just considered a move. But if the stock price moves up $15 then quickly moves down $11, it could be considered a countermove. |
Related Definitions
Articles Of Interest
-
Support And Resistance Basics
Understanding the concept of Support and Resistance in trading can drastically improve your short-term investing strategy. -
High-Tech Fibonacci
Fibonacci developed this system in the Middle Ages. See how it can provide accuracy without sacrificing readability. -
Speed Resistance Lines
Learn how to measure the uptrend and downtrend lines on a finance chart. -
Using Double Tops And Double Bottoms In Currency Trading
Find out how to apply the two most common price reversal patterns to your trading. -
Can Perpetual Contrarians Profit As Traders?
Succeeding as a contrarian is all about knowing when to act on your opinion about the next turn in the market. -
Forex: The Memory Of Price Strategy
Hate getting stopped out right before the price reverses? This forex trading strategy may help. -
Advanced Fibonacci Applications
Extensions, clusters, channels and more! Discover new ways to put the "golden ratio" to work. -
Market Summary for May 24 2013
The major U.S. indices moved lower this week, ahead of the long Memorial Day weekend. After reaching all-time highs last week, many traders attributed the sell-off to a combination of profit ... -
What Type Of Trader Are You?
There are different ways stock traders attempt to profit from market movements. Which of the strategies do you use? -
Strong Volume Gainers, Can It Continue?
Volume is one of those indicators that gets overlooked, likely because it's shown by default on almost every chart, making it a little dull. But volume is what drives markets. Big volume jumps ...
Free Annual Reports