When all charts point to a single direction and the current market sentiment is supported by the newswires, it\u2019s easy to understand why many traders hesitate to go against the herd.<\/p>\n\n\n\n But as investment pundit Warren Buffett famously said, \u201cWe should also be fearful when others are greedy and greedy when others are fearful.<\/em>\u201d<\/p>\n\n\n\n You see, just because a majority of the traders out there have a certain trading bias, it doesn\u2019t necessarily mean that they\u2019re right.<\/p>\n\n\n\n Sometimes, strong momentum merely reflects the entrance of trading amateurs that just go with the flow without knowing what\u2019s driving price action.<\/p>\n\n\n\n This is why following the flock blindly can lead to herding bias \u2013 one of the\u00a05 common trading mistakes\u00a0traders make.<\/p>\n\n\n\n Ask anyone who has successfully tried trading against the herd and they will tell you that it can feel intimidating when your analysis leads you to an unpopular bias.<\/p>\n\n\n\n But sometimes, it pays to go against the herd and be the odd one out \u2013 to be the contrarian.<\/p>\n\n\n\n Contrarian trading<\/strong> is a forex strategy that favors going against the current market bias in anticipation of a shift in market sentiment. It involves buying a currency when it is weak and selling it when it\u2019s strong.<\/p>\n\n\n\n Contrarian traders try to take advantage of moments when the markets get carried away by strong momentum.<\/p>\n\n\n\n When everyone and his grandma is ready and willing to push prices higher, it can sometimes lead to overpriced assets. Likewise, when everyone is hell-bent on selling an asset, opportunities to buy at a bargain arise.<\/p>\n\n\n\n One of the main benefits of contrarian trading is that it allows you to get good prices and catch reversals right as they begin.<\/p>\n\n\n\n In turn, this often leads to very attractive\u00a0reward-to-risk ratios, giving you more bang for your buck.<\/p>\n\n\n\n However, contrarians trade against the\u00a0trend, and that doesn\u2019t always work out in their favor. As the saying goes, \u201cthe trend is your friend,\u201d but it can be a mean son of a gun when you fight it.<\/p>\n\n\n\n When a trend is particularly strong, it can bust right throw potential reversal points and wash away those who go against the flow.<\/p>\n\n\n\n By no means am I saying that you should go against the trend just for the heck of it.<\/p>\n\n\n\n What I\u2019m merely saying is that if, after thoroughly conducting your own\u00a0fundamental\u00a0and\u00a0technical analysis, you have enough reason to believe that the market is about to turn, don\u2019t be afraid to go against the herd and take a contrarian position.<\/p>\n\n\n\n Remember, you don\u2019t always have to go with the flow; plenty of lucrative trading opportunities arise from straying from the crowd.<\/p>\n","protected":false},"excerpt":{"rendered":" Some days most forex pairs are just going in one particular direction and it makes no sense to go against the herd. However, if you\u2019re a fan of\u00a0picking tops or bottoms\u00a0and if you think that these strong trends are already exhausted,\u00a0you shouldn\u2019t be afraid to take a contrarian approach\u00a0to your forex trades. When all charts […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[441],"tags":[],"_links":{"self":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/10129"}],"collection":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/comments?post=10129"}],"version-history":[{"count":0,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/10129\/revisions"}],"wp:attachment":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/media?parent=10129"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/categories?post=10129"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/tags?post=10129"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/bpcdn.co\/images\/2020\/11\/20142815\/Against-the-Trend-360x345.png\")
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