Our counter trend rules:
If we are considering counter trend we want over whelming additional information to consider, such as:
- Proven support/resistance levels.
- W pivots.
- Divergence on higher time frames.
- Price action proving it does not want to progress for hours, double tops/bottoms , higher lows/lower highs, evening/morning star patterns, engulfing closes.
- Psych levels eg round numbers
In addition to the right kind of price action on 1hr or 15 min, double tops/bottoms , higher lows/lower highs, evening/morning star patterns, engulfing closes.
Our counter trend rules were met. Price was in a proven support/resistance area from Feb-Mar '14 and a W pivot 1.6728 (click on the charts to see in greater detail). On 15th we had divergence on 4hr and 1hr, price moving for hours that it did not want to go lower and a classic higher low on 15 min and 1hr.
Entry 1.6775, we exited at the W pivot R1/round number 1.6900 for 121 pips.
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