Counter trend traders will often use a combination of price action and indicators to find and make their counter trend trades.
One of the most straightforward strategies to make counter trend trades is combining price action and an indicator like the relative strength index.
Using the RSI indicator, you will be able to identify when a market is overbought or oversold and is looking at making a potential correction.
In the example counter trend strategy below, we use price action to identify potential counter trend moves.
Price had been in a strong trend lower, but price moves into a demand and support zone.
Counter trend traders could be looking at this support level to make potential long trades against the trend lower, looking for price to correct against the trend.
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