DEFINITION of 'Countertrend Strategy'
A trading strategy where an investor attempts to make small gains through a series of trades against the current trend. It is also known as "counter-trend trading".
BREAKING DOWN 'Countertrend Strategy'
Contrarian investors perform counter-trend trading strategies - purchasing shares when prices are low and selling when they're high. The investor receives smaller gains since the full market swing is not recognized.
Many counter-trend investors use momentum indicators to determine the best times to execute their trades.