In my last trade I took a short position in EURJPY which it's very obvious if you look at the market trend it was a counter trend position. Trading with the trend is much more easier than against the major trend as you have to momentum trading in your direction. But as a professional trader you have to consider both side of the market and counter trend trading not only that it gives you the chance to make some money if you lost the train on the trend trading move but it can give you the possibility to catch the reversal of the trend when this happens.

Here are the 3 major reasons why I have decided to take that short EUR/JPY trade:
  1. Elliott Wave 5 wave sequence completed.
  2. Overbought conditions.
  3. 142.00 Major historical resistance level.


  • Figure 1. EUR/JPY Daily chart, Elliot Wave 5 wave sequence.

In Figure 1 you can see the daily chart with the five wave sequence completed. Although you can't see here that 142.00 is a major resistance level I'll suggest to go to a weekly chart and look all the way back until 2003-2004 where the 142.00 level acted as a strong major resistance level. The next major thing that you have to consider when counter trend trading is that you don't want to stay for to long in that trade, as the market can quickly turn against you, so that's the reason my TP is targeting previous daily lows.

The only thing that I'm patiently waiting for is for my taking profit order to be executed, but at the same time you want to protect yourself from unwanted spike movement in price, and move your SL to BE.

Best Regards,
Daytrader21.
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