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.

  1. Countertrend Trading

    A type of swing-trading strategy that assumes a current trading ...
  2. Trend Trading

    A trading strategy that attempts to capture gains through the ...
  3. Contrarian

    An investment style that goes against prevailing market trends ...
  4. Trend

    The trend is the general direction of a market or of the price ...
  5. Forex Trading Strategy

    A forex trading strategy is a set of analyses that a forex day ...
  6. Momentum Investing

    An investment strategy that aims to capitalize on the continuance ...
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