Never miss a story from Richard Krivo

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Richard Krivo

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

 Instructor’s Response:

 
That is correct.
 
While pips can be made by trading "counter trend", those pips will come at a higher risk. As traders, we do everything that we can to reduce our risk in trades. One of the key steps we can take to reduce risk is to only take trades in the direction of the Daily trend.
 
Note on the historical EURUSD chart that you posted, how short and choppy the bullish (countertrend) move after the hammer candle is and how much longer and smoother the bearish move (in the direction of the trend) after the doji is.  This is an excellent visual example of the impact on price action trading in the direction of the trend can have. 
 
chart 5 24 10