Contrary Trading: A Live Example And Big Potential Profit Opportunity
Contrary trading if done correctly can give you low risk and excellent profits if you know how to spot them and time your entry correctly.
Here we are going to look at a contrary trade that looks a great opportunity which we looked at a few days ago
Lets see how things are shaping up.
The US v Canadian dollar has given us some great profits from the downtrend now we have that banked profit and were looking for a bounce and think were getting close.
Right, let?s take a look at this trade.
Pull up a free chart service such as futuresource.com and let?s get started.
Key Support
Is 1.10 ? This is key support on the daily charts
Momentum is still down in the dollar, but stochastic momentum is oversold and the Relative Strength Index (RSI) is very oversold at just above 10!
Yesterday?s move to the downside may prove a near term low.
Watch for a double bottom to form and stochastics to turn to the upside with bullish divergence.
If the RSI rises as well, we should have at least a good bounce to correct the technically oversold position.
Target would be the middle of the Bollinger band at around 113.00.
Key off support with change In momentum
The key as we said at the weekend is to wait for confirmation before jumping in.
You need confirmation of a near term bottom and change in price momentum before trying the long side.
Stop levels at below 1.10 on a close basis and odds of a bounce are high.
When the majority think one way then
A move in the opposite direction is likely
The dollar has had a lot of bearish news recently and in the short term prices should at least bounce - this is the opportunity outlined above.
Contrary trading is all about trading against the consensus and this trade is definitely that!
My in box is full of lots of reports telling me the dollar is in free fall and has no chance of recovery ? but in the short term there is:
As all the bearish fundamentals are discounted and a bounce should therefore occur.
This is what contrary trading is all about ? low risk high reward and trading against the majority.
FREE ESSENTIAL TRADER PDF’S AND MUCH MORE On all aspects of becoming a profitable trader including features, downloads and some great FREE Trading PDF’s visit our website at www.net-planet.org/index.html
MOST VIEWED POSTS
-
Day Trading Systems - The One Criteria To Judge Them On
When buying a day trading system or any other system for that matter, you should use one criteria to judge them ? yet most traders who buy trading systems don?t even consider it and lose!Here it is, use it and you will not only save money but give you the possibility of making money.
It?s a [...] -
Forex Trading Facts
Forex trading, or foreign exchange current exchange trading, is a global phenomenon. This is the single largest market in the world. There are many different market sectors that are involved with Forex trading. These include, but are not limited to; ” Banks” Corporations” Governments” Individuals
What is Forex trading you ask? At its simplest, Forex trading [...] -
The Elliott Wave Theory In Forex Trading
The Elliott Wave Theory that is used in Forex trading is named after a man by the name of Ralph Nelson Elliott, who was around in the nineteen twenties and thirties. Elliott was the person who discovered that stock markets did not behave in a somewhat chaotic manner, which was previously thought to be the [...]
-
Forex Trading: Knowledge Is Power Not In Forex Trading It Isn?t!
I read all the time about how important it is to learn lots of information to trade forex and how you continually need to learn, but this is NOT true.
Succesful Forex trading is actually very simple and the knowledge is easy to acquire, yet 90% of traders lose - so why is this ?
Because knowledge [...] -
How To Choose Your Forex Broker
To become successful in forex trading, you will need a good forex broker. Your forex broker is one who will execute all your trades according to your wishes while earning a commission for each trade. There many forex brokers out there competing for your business and it can be quite hard to determine which one [...]
-
Forex Trading - Tips On Buying Courses & Systems
Many traders are daunted by the thought of forex trading so they decide to get help from an expert mentor or guru.
Let?s look at some tips on how to choose one.
Firstly, the vast majority of advice sold on the net is either available free anyway, or simply does not work.
Think about it:
If you do [...] -
Forex Trading Secrets - Can You Really Rely On The Books?
As more and more people are considering investments as a way to take care of their futures, the forex market is booming. There is much material on the market, both in print and on the Internet, about the latest investment trend. Most of it boasts to offer forex trading secrets that are unique and can [...]
-
Forex Trading, What’s It All About Then?
What is this, I ask myself. It is short for foreign exchange trading it would seem. It sounds complicated and deeply involved, and probably mathematical. No, I?m sure it is not so scary that I need scratch my head every time someone utters a mention of Forex.
Forex Is simply the abbreviated name for the market [...] -
Forex Education: Want To Buy Advice? 2 Tips To Help You Get The Best Education
Forex education is vital if you want to succeed but most traders simply have no idea what is good advice and believe advertising copy, but you need to go beyond the copy to get good advice.
Most what you need to know is FREE on the net. Let?s look at where to get the best advice [...] -
Learn Online Forex Trading: The Basics Of Fundamental And Technical Analysis
The Forex trading market is an around-the-clock cash market where the currencies of nations are bought and sold, typically via brokers. Forex prices can change at any moment in response to real-time events, such as political unrest or the rate of inflation. Currency market players typically use “Forex analysis” as a means of predicting currency [...]
-
Technical Analysis: How To Use It For Big Profits
Technical analysis is the most effective way to make money in online FOREX trading, or any other market ? Here we will show you why it is so effective and how to and avoid common errors.
So firstly, why does technical analysis work?
Let?s look at how investors determine price and the equation for predicting market [...] -
Online Forex Exchange Trading
The widespread application of internet technologies and improvements in communication systems have opened up the gate of online foreign exchange trading for small or medium traders. It is now the most cost-effective means of communicating online with the markets, traders, and financial institutes. As per the recent surveys, currencies worth more than $3 trillion are [...]