Counter Trend trades on Crude, Dow and ES were prevalent today. Counter trend trades are trades that go against the higher timeframe’s trend direction. The only time we use counter trend trades is when the THD ADX indicator shows that price should retrace back to the ATR stop (+ sign on chart).
Initially, the downtrend that we had yesterday, was because of magenta peaks coming in to push price down to the ATR stop. However, because these retracements “rolled” into the 180, the downtrend was developed. Then we had numerous counter trend trades come in during Asia. (Click on any chart to expand the image)
Counter trend trades on Crude entry was 37.78 and exit was 37.83.
ES Counter Trend Trades – Entry 2090.25, exit at 2084.25; Entry at 2073.25 and exit at 2081.50
Dow Counter Trend Trades – Entry at 17833, Exit 17780; Entry 17700, exit at 17760.
The entry for the counter trend trades on Crude, Dow and ES can be confirmed using the 3 minute chart. If the counter trend trade is to the short side, then the 3 minute chart should have a red ATR and price should retest the ATR (which is above price) for resistance. If the counter trend trade is to the long side, then the ATR should be blue on the 3 minute chart and price should retest the ATR (which is below price) for support.
For example, this morning the Euro Currency Future had an ADX magenta peak on the 45 minute chart to the downside. The 3 minute ATR went from blue to red. Price was retesting the ATR with a lack of buying pressure. A short was entered. Profit was taken at the 45 minute ATR. Entry on the Euro was at 1.0863 and exit was at 1.0846.
The THD Strategies will be available soon on a subscription only basis (either quarterly or annually) for clients that have the indicators. Of course with our new subscription service, clients will always have the latest indicators, online training courses, and access to a weekly webinar on Mondays from 10am till noon.