Strategy Library

Counter-Trend

Fade extremes. Higher-skill, higher-reward, much higher loss rate.

Counter-trend means betting price reverses against the dominant direction. It pays well when right because you catch the reversal early — but it loses often, so position sizing and trigger discipline matter more here than anywhere else.

How to identify it

  1. Find an exhausted trend: divergence on RSI, climactic candle, parabolic move.
  2. Look for a clean rejection at a major S/R or liquidity pool.
  3. Confirm with multi-timeframe shift (M15 BOS against H4 trend).

Trading rules

  • Smaller position size (0.3-0.5% risk, not your usual 1%).
  • Tight SL just beyond the extreme.
  • Take first TP fast (1R) to lock in.
  • Cut quickly if structure doesn't shift on M15.

Common pitfalls

  • Most counter-trend setups fail — don't add to losers.
  • Holding for a 'mega reversal' when 1R is right there.
  • No higher-timeframe rejection — pure greed.

When to use it

Use sparingly, only when you have multiple confluences. Skip if H4 momentum is still strong with the trend.

Best pairs

XAUUSD, GBPJPY

Best session

After major news or session close

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