Countertrend Trading

Filed Under » , , , , ,
Dictionary Says

Definition of 'Countertrend Trading'

A type of swing-trading strategy that assumes a current trading trend will reverse and attempts to profit from that reversal. Countertrend trading is a medium-term strategy in which positions are held between several days and several weeks. Countertrend traders rely on graphs (such as the Bollinger Band®), indicators (such as the Aroon indicator) and oscillators (such as the relative strength index or Chande momentum oscillator) to make their decisions.
Investopedia Says

Investopedia explains 'Countertrend Trading'

Countertrend trading can be used as part of a diversification and risk-reduction strategy. To limit losses in the event that a trend does not reverse, traders should consider using strategies such as stops and time-based exits. Countertrend trading is one of the most common tools used by contrarian investors.

Articles Of Interest

  1.

    Confirming Price Movements With Volume Oscillators

    Use this indicator to validate a change in price direction and moving averages.

  2. An Introduction To The Relative Strength Index

    Learn the difference between relative strength and the relative strength index, a frequently used technical analysis oscillator.

  3. Momentum Indicates Stock Price Strength

    Momentum can be used with other tools to be an effective buy/sell indicator.

  4. An Introduction To Oscillators

    Find out how this indicator may help improve the average investor's entry and exit points.

  5. Anticipate Trends To Find Profits

    Monitoring your trades in real-time can help you anticipate their outcomes.

  6. Finding The Trend With Aroon

    Don't be confused about whether a long-term trend will continue, stall or reverse.

  7. Candlesticks And Oscillators For Successful Swing Trades

    Take advantage of short-term price moves by pinpointing reversals.

  8. Low Expense Top Performing ETFs

    A technical look at the four ETFs that rank highest for five-year performance, lowest expense ratio and total net assets.

  9. Break Into Forex In 12 Steps

    Learn how to get started in forex trading.

  10. Market Summary For June 7, 2013

    The major U.S. indices were mixed this week as modest improvements in employment numbers struggled to offset stagnant wages and a slightly higher unemployment rate.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Yield Elbow

    The point on the yield curve indicating the year in which the economy's highest interest rates occur. The yield elbow is the peak of the yield curve, signifying where the highest interest rates occurred.

  2. Xenocurrency

    A currency that trades in markets outside of its domestic borders.

  3. Wanton Disregard

    A standard of severe negligence. Wanton disregard is a very serious accusation that indicates that a person behaved extremely recklessly.

  4. Ultra ETF

    A class of exchange-traded funds (ETF) that employs leverage in an effort to achieve double the return of a set benchmark.

  5. Toehold Purchase

    A purchase of less than 5% of a target company's outstanding stockmade by an acquiring company. A toehold purchase of just under 5%, while not a significant stake in a firm, allows the shareholders a "toe-holds" grip on the company and its decision making.

  6. Samurai Bond

    A yen-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations.
Trading Center
http://sp.fastclick.net/ad/tr/10858-64082-15546-0?mpt=c52ab67aec816378c41abe8a7f25d5f5