Market Update 23/04/2021, Countertrend Moves
Hello traders Thiru Nagappan here founder of Master the Markets, Elite Trader’s Conference, and Traders Open Day. So welcome to Market Update 23rd of April, 2021. Four months have already gone by and we are now going into May as well. Time flies, isn’t it traders? but at least the good news is we are slowly coming out of lockdown, we can enjoy the sunshine. Today onto the markets, today’s topic, it’s going to be on Counter Trend. Okay, on counter-trend. Now, what is firstly a counter-trend move? What is it? you see, for example, firstly we must understand a counter-trend move is basically in other words what we call a feast to move, it’s against the trend. It’s against the trend. So firstly, it must be in trend first so that’s the first thing. So for example, you must have an uptrend first, or a downtrend, no compression here in counter-trend. So, you must first have it in trend. And at that point, when it goes against the trend that means when the top gets confirmed and a top gets confirmed that is what we call a phase two move, and that is what also in other words we call a counter-trend move. Okay, so that is what we call a counter-trend move firstly it must be in trend. Secondly, it’s that phase, which goes against the trend in an uptrend, that is the top being confirmed and here will be called a top to bottom move. So very similar to what we have here on the cable on the daily time frame here. As you can see over here it’s an uptrend. And then now it’s coming back down, top got confirmed as of yesterday, that is what we call a counter-trend move or a phase to move, because remember, the market or price never moves in a straight line, it moves in cycles so you will have phase two moves. So now that is good to have understood what is a counter-trend move so we move on forward. Remember, the opposite is true for a downtrend so, for example, will look like this, and that is what we call phase two, move for the counter-trend move. Okay, good. Now, this second thing is, you may ask, okay, why is this important to know? Okay, the reason why it’s important to know is for a various of reasons. Now, one reason why it’s important to know this is because one way to trade it is that when you get a counter-trend move, usually if you get a very extended move of the counter-trend and it keeps going all the way down and you get a price structural failure and it keeps going down further, just like what happened in cable in March 2020. Do some very great long moves to capture when everyone didn’t even expect it. So that is one reason why you can look to trade counter-trend moves to capture big massive moves when no one is expecting it big, massive moves when no one is expecting it. Another way to trade a counter-trend move is to stay out of it and to wait for phase one to resume. Okay, so the position yourself for turning points that’s another way to trade. Position yourself a turning point back into phase one, so for example, here, you want to you, expecting and you’re looking for a turning point for it to come back down again and confirm the top. So you’re waiting for that specific point in that counter-trend move to revert itself back into momentum. Okay, so that’s why it’s good to know when it’s in counter-trend for these two reasons for either capturing big moves or either capturing turning points. Now how do we specifically trade it, As I’ve mentioned in the why. There are two ways, either you’re looking to capture the contrarian move or to capture the momentum move. I will just cover one of the momentum moves, but in relation to a higher time frame, so let’s now take a look at that. And I’ll give you a specific setup and I’ll give you a very small homework to do as well. And you can look into that. Now, just as I remembered. One thing I must do mentioned is that we recently have got our Trader personality test just released out which you guys can take as well. Let me just bring up the site that you guys can take that on.
Yeah, so as I was saying the trader’s personality test that we’ve just gone is over here. And in fact, the good thing is that we as our Trader coaches for yourself, you can book a coaching session, or we’re here and we can run to the trader personality tests a few, and do a live trading session along with review as well. Okay, so getting back into this now, how do we actually trade this to enter remember as well. You have to tailor a strategy according to your personality issues sometimes traders just chase after the strategy of the strategy, and it doesn’t really fit their personality. So that’s why it’s very important to start off with knowing your personality that’s why we designed the traders personality test, and then after that, then to tailor actually a strategy that fits you, especially for beginners or intermediate, this is very very critical, and especially for beginners you know if you can get it right right from the beginning is much better. Okay, so that’s the whole structure that we have designed the coaching session in which will take you through. So the last part of this, you see for some of your personality this kind of strategy will fit and I’m going to give you the pattern on how to trade this counter-trend move. Okay, so the first thing first you have to look for on a lower time frame. In fact, if you see it’s going to be like a counter-trend move like that let’s say this is a downtrend and not face to move okay downtrend phase to move. And let’s say this was on the lower time frame. Let’s say for example the one hour. And on the other hand, on the higher time frame. It looks like this. Okay, so it’s actually an uptrend, phase one where the bottom got confirmed ut p one ut p one, okay. So as you can see over here on the lower time frame, it’s a counter-trend. But however, in a higher Time Frame. Let’s see, the daily or the four-hour time frame. This is actually in phase one in momentum in the trend phase, phase one. Okay, let’s take a look at an example where this is as such. So, let’s now look at that. So let’s see, so let me just put it side by side and it will make more sense to you. So let me just do this over here. And this over here. Okay, So then you can see it side by side and it will make much more sense as well.
Okay, good. So we got our charts and you can do that as well, by yourself. Okay, so let me just draw that for you. Okay, so over here you see on the four-hour what you have is something like that right an uptrend and at the moment it’s phase one. See that’s why it’s very important to get your tops and bottoms quantified alright?. And then over here so you see this is a UTP one on the four-hour time frame. Whereas, on a one-hour time frame, you can see over here. It is a downtrend phase to move. Okay, but both are signaling on the upside, but a one time frame, it’s a counter-trend move on the other time frame, It’s a momentum of, I would say if you want to trade counter-trend, just focus on one pattern first and once you got that right, and then you move on to the next type of pattern but in the same category of counter-trends. So this one over here, the concept is one-time frame is counter-trend but the higher time frame is in momentum and that’s what I’ve shown you. Why don’t you go ahead and practice with a small exercise on other kinds of time frames and also you know on the opposite side. How about this one being in uptrend phase two. And then this one being in downtrend phase one, you can look for that too. Okay, so I’ll leave that to you as an exercise, but so far what we have covered so far this topic of counter-trend we went through, what is a counter-trend so firstly you must be in trend, then it’s face to move, or a counter-trend move that’s the what, why is it important because you can capture very big contrarian moves, or in also related to a trend on a higher time frame, which will surprise people and can give you quite large moves Okay. As the large moves, this is phase two and finally, how I showed you one pattern of how you can do it, Wherein a lower time frame, it’s phase two, but not the higher time frame, it’s a phase one move okay. Right. So that’s to do with that so now let’s move on to the market watch, and let’s take a look at all the different markets for today. And then we’ll move to our performance as well. So over here as you can see in dollar Swiss is a downtrend at the moment. You see it’s a counter-trend this is a talked about but it’s taken a price structure failure really quite a big move over here. Okay, so that’s what we got over here so open equities diminishing to the downside. So I would say take it to the upside on this dollar-yen on the other hand, as you can see it’s a downtrend move over here and open equities diminishing to the downside I would say be cautious if you are taking still on the downside, make your stop losses tight because the bars are getting smaller, closes are getting more and more nearer to each other, GBP USD on the other hand over here we’ve got an uptrend, but this is a counter-trend, just confirmed and on a higher time frame, it is still in an uptrend, face to move as well so if you do want to take as a reversal be cautious. I would say still there’s a bit more open equity to the downside before it comes to the upside. Eurodollar on the other hand, as you can see, its open equities diminishing to the upside. So I would be cautious on that Aussie dollar open equity is diminishing to the upside, so I will look more to the downside. GBP yen, open equities diminishing to the downside, so I’ll look for reversion into phase one bitcoin, on the other hand, there’s a bit of a drop at the moment is set a price structural failure. And it’s gone below is 50,000 level, open equity is diminishing to the downside I would say, short term retracement to the upside. Brent oil on the other hand, you can see over here. It’s an uptrend at the moment. Open equity is diminishing to the upside. But I would say if this is a small profit-taking point first level to look at is for this to be taken out before we look at any shorts to the downside, or wait for confirmation. Gold on the other hand, you can see over here. Open equity is diminishing to the upside. So I would look for if I’m cautious, tighter stop loss and wait for a tick counter trend moves and are related to higher time frame, or wait ticket for the top to be confirmed first see, on the other hand, uptrend, open equity diminishing to the upside. Over here, so I would look for shorts. At the moment, and even if I were to take long, so be a bit more cautious and look for particular resistance levels to be taken out. Dow Jones, on the other hand, open equity of course as diminish, to the upside is confirmed still hovering around, I would say more open equity definitely to the downside if it takes on this level over here. Okay, SMP very similar over here again on the support level if I take that out, then I’m looking more to the downside, silver on the other hand, open equities, a little bit more to the upside, but I’ll still be cautious. After this profit-taking over here if it does stall once again. We, on the other hand, really strong upward move over here that we had, after a small profit taking here definitely open equity diminished to the downside, looking more to the sorry, but I quickly diminished the upside, looking more to the downside. For shorting opportunities on this for short-term moves Okay? Also if you don’t want to do counter trend you wait for the trend phase one to come back up again. Right. I guess that’s pretty much that on the market watch over there. And now we move on to our performance. This is the market update performance for this week. So elite room, quite flat on most of the strategies, not getting our setups market has been quiet, slow exits, we had a small profit of point 5% In terms of the live trading room, we had a few small losses. Three strategies are flat, the other three strategies we took a few small losses he appointed 3.2 9.41 overall minus 1.53% on the live trading room. Remember when the market is not in momentum and you’re not getting the setups you go through small drawdowns like this, but just keep it very very small. So across the two rooms, you can see we’ve kept the loss quite small, minus 1.04%. One balancing out at the elite room curves a bit more spooler, because we take very very quality setups, low frequency. Alright, so I think that’s pretty much that from me on this market update. So the topic of interest counter-trend do reflect on it to integrate it to practice it, and then also start to practice also practically on the screen and observe those setups as well. Okay, so that’s all for me and the last reminder I just remembered is yeah, your personality test so be happy to meet you guys. And to do their personality tests a few be very interesting. We are very excited as well, to put more people through the test, and to tailor a strategy that fits you so that you know you can really enjoy the process, and be in the flow of the market for peak performance. So we look forward to seeing you on the coaching session, where we’ll do the trader personality test and tailor a strategy or direct you to a video course that will be pertaining to your personality. All right, that’s all from me for now and as we always say till the next time, stay disciplined for your trading plan, and keep trading, like a master.