What is Trend trading:
Trend trading is a trading strategy that seeks to profit by analysing an asset’s movement in a specific direction. A trend occurs when the price moves in one general direction, such as up or down.
When a security is going higher, trend traders take a long position. Higher swing lows and higher swing highs describe an upswing. Similarly, when an asset is going downward, trend traders may choose to initiate a short position. Lower swing lows and lower swing highs describe a downtrend.
What is Counter-trend trading:
A countertrend approach aims at generating small profits by trading against the current, larger trend.
It is a kind of swing trading in which the trader assumes that a prevailing trend will have reversals and seeks to benefit from them as the trend continues. Countertrend trading is a medium-term approach with positions held for many days to several weeks.
Traders that follow this technique make lower profits and are prepared to sell if the expected downturn does not occur. A countertrend approach ignores the traditional financial concept that, at least for the time being, the trend is your friend.
