The Fusion Method of Homeopathic and Countertrend Strategies in Foreign Exchange Trading

The discussion between homeopathic trading and contrarian trading has been going on for hundreds of years, and there is no conclusion. Here is a summary: whether it is homeopathic or contrarian, it is not as effective to use the two together. InDLSMIn foreign exchange trading, this integrated mindset can help participants respond more flexibly to market changes.

What is homeopathy?

If it is defined, it is to place an order along the channel direction and the direction of the moving average. It should be noted that whether it is forward or reverse, it is judged within the range of the K-line of a specific period. The 1-minute K-line is the 1-minute K-line, and the 1-hour K-line is the 1-hour K-line. Adjacent periods help to judge the forward and reverse relationship, but it is easy to disrupt the judgment logic of the forward and reverse.

What is a contrarian trend?

If the next definition is for it, it is a trading method with resistance levels as the core. Without considering the channel direction and the moving average, trading only according to the resistance level is a counter-trend trade. The strength of the resistance level is closely related to the time period and the number of chips. The larger the time period, the stronger the resistance; the more chips, the stronger the resistance. The stronger the resistance, the greater the space for up and down movements when breaking through. It can be said that the chips determine the space for price fluctuations. The so-called chips refer to the size of the position on a parallel line. The longer the parallel line, the larger the position. Breaking the stop loss of the position is one of the core goals of the main institutions, because the stop loss can be doubled with half the strength. This is crucial to understanding the laws of the market, and traders who cannot understand it need to digest it carefully.

What is the resistance level?

Resistance levels are the target positions used by various types of traders in the market to enter and exit the market. According to their importance, they are: channel levels (mainly including channel levels, graphic levels, and parallel levels), gold levels (i.e. golden sections, including large gold levels and small gold levels), moving averages (including the main moving averages on each cycle), and technical indicators (positions formed by various technical indicators). If these four resistance levels overlap with each other, they will form stronger resistance levels.

How can we combine homeopathic and contrarian trends?

That is, within the same cycle or adjacent cycle range, first determine the main direction, and then identify the important resistance level. If the principle of entry and exit meets both the requirements of the resistance level and the direction judgment, then this position is called the excellent entry level. The advantage of the excellent entry level is that if the direction continues to run, the trader can profit to the next resistance level with the smoothest state of mind due to the excellent position and low pressure. If the direction reverses, you can leave the market with a small stop loss, or even enter the market in reverse. It is known that in the same cycle or adjacent cycles, many resistance levels will appear every day (resistance level means that someone enters and exits and changes the short-term direction), while the excellent position rarely appears. The accepted market law is that 5% of the people earn 95% of the people's money, so the prime position is only a few relative to the resistance level. The so-called trading to reduce the number of entries does not really require you to deliberately reduce, but to find the prime position in the resistance level, that is, to meet the conditions of both direction and resistance level trading. In the actual battle of DLSM foreign exchange, the larger the K-line period, the fewer the prime position; the smaller the K-line period, the more the prime position.

Newcomers or veterans remember?

To become a trader in the 5%, it is not simply homeopathic, nor just bucking the trend, but looking for the combination of the two - the best position to trade. But nothing is certain. If someone is keen to trade orders and there are hundreds of resistance levels on the one-minute line every day, they can also make amazing profits by trading against the trend.

Notes on trading in an excellent location.

First, try not to cross cycles as much as possible, and only choose adjacent cycles if you want to cross. The probability of success is very small, and it is easy to get confused once you cross. Changes in long and short cycles, whether short or long, will theoretically bring disadvantages, and this principle has been described in detail in previous posts. As long as you stick to your excellent position, you will eventually be able to succeed. Second, pay attention to the variation of the pattern, especially the change of the chips. The more chips you accumulate, the more likely you are to change your excellent position, that is, time may become your enemy. If you exceed the time but can't make a profit, you need to leave the market, and there is no need to tear the future trend. Third, pay attention to the variation of the direction change. There are many such variant patterns, which need to be carefully observed. However, in any case, if you mutate, you have an excellent position as a guarantee