Which is better in FX, contrarian (counter-trend) or trend-following? The answer is always trend-following. If your aim is to make money, contrarian; if you intend to profit, trend-following.
For a long time now
There has never been a time when this topic ended for someone who trades FX
Perhaps an endlessly unresolved topic
But I have already reached a conclusion about this topic
I believe it is the so-called technique-based and loop-based approaches
Counter-trend trading can indeed earn a lot
If the goal is to make money, counter-trend trading
also has a strong tendency toward averaging down, which is characteristic of counter-trend trading
That’s why counter-trend trading blends well with averaging down
the more you use it, the more you can earn
However, it becomes very weak in a trending market
Because the characteristic of averaging down in counter-trend trading gets in the way
With that characteristic, in any market it would “come back,” which is why you could earn
But in a trending market, there are times when it doesn’t revert
Even if you’re averaging down, there are markets that won’t save you
If you can’t cut losses at that time, you will obviously lose
Losses at that time can be quite large
This is the disadvantage of counter-trend trading and
the reason it’s called a technique
Counter-trend trading can be used if you can cover losses with technique-based methods, but
in reality, many traders should use the trend-following approach of the sequence
If you want to build wealth later, trend-following is absolutely better
The market is fundamentally split into range markets and trend markets
Simply put
Markets that revert = range markets
Markets that don’t revert = trend markets
You can think of it like that
Trend-following is a style that trades in the trend markets where prices don’t revert
Because markets that revert occur far more often
Until a non-reverting market appears, the number of losses from cutting losses will continue to increase
However, just as counter-trend averaging down ends in a loss,
the trend-follower taking the opposite trades will
see profits grow if a non-reverting market appears
As you become accustomed to this, pyramiding (scaling in) will also become possible
What you actually did when you were losing was
to lose the sense of counter-trend and averaging down; it becomes even better
Because all your thinking and concepts shift to trend-following
If you shift to a trend-following mindset, in any market
you’ll Trade only in non-reverting markets to expand profits with trend-following
With only that awareness, your trading will naturally grow
If you understand this trading secret, the rest is about mastering a trend-following trading strategy
You can grow a lifelong amount of profits just with trend-following
※ If you want to keep earning in FX, go here ↓
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