Before that we understand what it means investing in Counter-Trend, it could be useful knowing the meaning of trend. The trend is simply the direction employed by the price in a certain time period.
It's defined bullish trend an upward movement of the price; as opposed to the bearish trends that are defined by a downward movement of the price.
The price can move in only three directions:
The market price follows a business cycle composed by a bull phase and a bear phase. The two phases last about 4 years. The bullish phases, as well as those bearish, are interspersed with price movements that are defined: intermediate movements.
These intermediate movements move to the opposite direction to the main trend. The intermediate movements last from 3-6 months to 9 months, in some cases.
INVEST IN COUNTER TREND
If you invest considering the economic cycle, then, the intermediate movements (countertrend movements) can be exploited to make a profit even from the phases when the price is decreasing. In order to start profiting you just need to follow the primary trend (long-term) and open a short position when it is not.
Investing in counter trends in long-term it's simple, but it takes consistent capitals. In short-term the problem is not connected to capital, but to the market instability (volatility), that makes difficult the exact individuation of the correction phases (brief phases in which the price assumes the opposite direction to the main one). The movements of corrections assume a totally different meaning if you observe graphs with time frames of 15 minutes. With this type of charts we will have many stages in which the price will take a direction opposite to the main one.
How to exploit these stages?
Our advice is to invest in binary options without overdoing it with the risk exposure (risk only 5% of the capital). This way you can maximize your investments and avoid exposing yourself too much to the possibility that the countertrend phase hard too little or even be reversed after the investment.
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