When the contrarian scenario works well and when it doesn’t USDJPY 1-hour chart

Hello!

Satori is here with FX research.


Today’s topic is the USDJPY 1-hour chart: “When the contrarian scenario works and when it doesn’t.”

The indicator used is, MT4 Contrarian Scenario RSI Bands Indicator 3-currency set.

http://fxmt4indicator.abproducts.biz/wp/?page_id=1554




The above image shows an entry prepared when price crosses beyond Bollinger Band Sigma 3 (2–3). When the market reverses and RSI approaches around 50, and Sigma 1 (0.5–1.5) breaks, entry is made, and exit occurs at the Band’s middle line break as in the example.

In this case, although modest, being on the 1-hour chart allowed earning around 10 pips on both buy and sell sides.

Next, a contrarian scenario not a failure, but simply a case of luck.



In the above image, a buy signal appeared for contrarian scenarios, but then a downtrend began.

In such cases, one should be mindful of selling on a rebound or employing a trend-following sell strategy.

Coincidentally, a buy entry signal appeared near the bottom, resulting in a small profit.

Thus, when drawing contrarian scenarios, the win rate can be high, but if you position against the trend, you may suffer significant drawdown.


If by any chance you enter against the trend, confirm that the retracement peak is low, and place a stop loss at a 10–20 pips decline from the retracement high.


Contrarian trading has a high win rate, so with proper execution, results should be favorable.

This series will continue for a while.



From the May 31 article on the “Dow Theory Application Filter,” GIFs used on the blog and MT4 test reports are now, as far as possible, available for free download as well.

This includes images from this time as well.


Blog images and MT4 reports: free download
http://fxmt4indicator.abproducts.biz/files/FXnoShirabe.zip

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