Differentiating Between Trending & Counter-Trending Set-Ups
An important distinction to be able to make as a trader is being able to determine whether you are in a trending market (impulsive) or a counter-trending market (reactive). Whether you choose to be a trend trader, or a counter-trend trader you need to know the other type by definition of what you do. If you are a trader for all seasons and take what the market gives you, you may be adept at both types of trading, and know which tools to use depending on what type of a market you are in.
We recommend that prior to trading the student identifies the current trends in place from the monthly on down to the 60 minute charts and lower — depending on which time frame you trade. While this information on the stance of the higher times frames is useful, it should not be confused with actionable intelligence. The trends on the monthly, weekly and daily charts are not something that you are going to be acting on right away, but information you are going to have, and be able to reference when need be. It’s always best to start out learning how to trend trade. But as you mature as a trader it’s going to be very important that you are able to gauge current shorter-term momentum against higher time frame support or resistance. It’s at these junctures that counter-trend signals can blossom into trend trades which can prove rewarding from a risk and experience standpoint.
If you are serious about improving your trading, and are willing to take direction, in a demo account first, I would be happy to offer you a complimentary one on one tutorial where we’ll teach you a technique to determine the direction of the current trend on any time frame chart,and how to use this information in your trading.
To schedule your one on one tutorial during U.S. business hours e-mail me at jnorris@brewerinvestmentgroup.com or call 800-971-2154 or 312-896-3986
Jay Norris
Senior Market Strategist
BrewerFX, Chicago
800-971-2154 / 312-896-3986
DISCLAIMER: Futures, options and Forex (off-exchange foreign currency futures and options, or “FX”) trading involves substantial risk of loss and is not suitable for every investor. The valuation of futures, options and Forex may fluctuate, and, as a result, clients may lose more than their original investment.