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I agree %100. I think the reason contra trend trading has somewhat of
a bad name is because
a) most people who try it don't realize it's not enought to have S&R
levels; you have to know HOW to trade S&R.
b) they don't stick to a set of rules, and
3) people don't stick to a specific set of S&R rules. Some people end
up having so many lines on their screen they can hardly see the bars!
Phil
www.sp-levels.com
--- In realtraders@xxxxxxxxxxxxxxx, "ira" <mr.ira@xxxx> wrote:
> A contra trend trade is based upon a signal, not upon an
assumption. You are basing the trade upon some system that says it
is going lower. You are not buying on weakness which means it is
going lower or selling on strength because you believe it should go
lower. Most contra trend trades are established when a trend trade
has reached a target that should act as resistance for the current
move. Whether that target is a measured move, a Fib. number, a
support or resistance level, that has proven its worth in the past.
Guessing, trading upon a gut feeling, trading on news, chasing a
trade and many other no nos are used every day and cost people a lot
of money. Ira
> ----- Original Message -----
> From: MikeSuesserott@xxxx
> To: realtraders@xxxxxxxxxxxxxxx
> Sent: Friday, February 14, 2003 6:26 AM
> Subject: [RT] Countertrend trading (was: ESH3)
>
>
> Hi Ira,
>
> I certainly appreciate your point, but a point can also be made
for occasional countertrend trading, if done with correct stops. For
instance, most Wolfe Waves start out counter to the prevailing trend.
If you remember the wave that I posted here a few days ago - though
it did not quite make it to the target line because of the Al Jazeera
video tape news, still the pattern if entered around the #5 point
made some good money on a small risk.
>
> One way to handle counter trend trades is by looking for trend
confirmation on a smaller time frame. Like when entering a counter
trend pattern on a 30 min. chart, one might wait for the new
direction to prove itself as a trend on a 5 min. chart.
>
> Regards,
>
> Michael Suesserott
>
> -----Ursprüngliche Nachricht-----
> Von: ira [mailto:mr.ira@x...]
> Gesendet: Friday, February 14, 2003 06:34
> An: realtraders@xxxxxxxxxxxxxxx
> Betreff: Re: [RT] ESH3
>
>
> It absolutely boggles my mind why a trader would buy weakness.
If it is falling, let it fall. If you think it is going to rise,
wait for it to prove to you that it is going to do just that, rise.
Then buy. If you are going from Chicago to New York, would you go
by Denver and San Francisco first. Why not just hop the train as it
leaves the station for New York?
>
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