Forex Trading Tip: When Trading Against a Trend Don’t Overstay Your Welcome

This is an important tip because many traders treat both sides of the market the same way.

Have you ever had a winning trade and held out for the last pip only to see your target miss by a fraction, the market reverse and give back everything you made, sometimes more?

It has happened to me and I am sure it has happened to you as well.

There is nothing more frustrating than having a winner and then giving it all back.

Have you ever asked the question why?

Many traders like to fade moves and trade against a trend. They love to try and pick bottoms or tops.

This is often referred to as contra-trading.

When trading contra, you need to be faster to take profits than when trading with a trend.

While there is no set rule, more times than not a contra move does not reach a target level for the trade and is quicker to reverse once the buying (or selling) runs out of steam than a move with the prevailing trend.

This trading tip suggests not to hold out for the last pip when contra-trading and why I say don’t overstay your welcome when trading that side of the market.

To sum up, as a general rule, be quicker to take your profit when trading against a trend than when trading with it.

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