We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
GBP/USD
Mixed
USD/JPY
Bullish
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Bitcoin
Bearish
More View more
Real Time News
  • $USDJPY may be set for a larger pullback on the back of a deteriorating risk environment amid the potential failure in US-China trade talks. Get your market update from @JMcQueenFX here:https://t.co/UOGT5xRX9v https://t.co/JLXsn96FQY
  • Poll: We've had some upgrades in a few growth forecasts from around the world recently and tomorrow brings the Nov PMIs (AUS, JPN, EZ and US). What do you think is the risk of a recession in 2020?
  • LIVE NOW: Join @JStanleyFX as he runs through price action set-ups for the FX and CFDs market. https://www.dailyfx.com/registerToSeminar?webinar=3952937094787220994&utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • staring now -> https://www.dailyfx.com/webinars/3952937094787220994?webinar=3952937094787220994&utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr https://t.co/fk3MmFxalj
  • That was a fast reversal in crude oil positioning among retail CFDs yesterday. Not as heavy a build up in short as we pressure 58 https://www.dailyfx.com/sentiment?CHID=9&QPID=917719 https://t.co/m1YFe8PEsM
  • LIVE IN 5 MINUTES: Join @JStanleyFX as he runs through price action set-ups for the FX and CFDs market. https://www.dailyfx.com/registerToSeminar?webinar=3952937094787220994&utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 98.09%, while traders in France 40 are at opposite extremes with 82.08%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/pxnhohjlR2
  • LIVE IN 15 MINUTES: Join @JStanleyFX as he runs through price action set-ups for the FX and CFDs market. https://www.dailyfx.com/registerToSeminar?webinar=3952937094787220994&utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • Crude #oil prices are approaching confluence downtrend resistance just higher at 58.45/61. Get your crude oil technical analysis from @MBForex here:https://t.co/YtqEw4joWZ #OOTT https://t.co/WISQjuukP4
  • Commodities Update: As of 17:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 1.77% Silver: -0.08% Gold: -0.30% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/MB2wIHd8Zh
A Trending Pip Count

A Trending Pip Count

2011-08-18 22:36:00
Richard Krivo, Trading Instructor
Share:

In our LIVE webinars each day, we always advocate taking trades in the direction of the overall trend as those will be the ones with the greater probability of success. That being said, there are two questions that are always asked: Why is that true? And, if that is true, is there really that much of a difference in the potential pips?

While pips can be made trading counter trend, they will come with a greater amount of risk. Essentially, when taking trades in the direction of the trend, the trader has the momentum, the “push” of the market behind them.

When trading countertrend there is less momentum pushing in that direction and the dominant trend can kick back in at any time negating some/all profits which may have been gained by trading against the trend.

Also, when a trader knows that they essentially have the “market behind their trade” when trading with the trend, they have more confidence to stick with the trade and let it mature as opposed to closing out the trade too early.

Lastly, counter trend entries need to be much more precise since you are trying to time an entry while it is moving in the opposite direction. On the other hand, entries with the trend can be more forgiving.

Let’s take a more in depth look at this concept on a Daily chart of the USDCHF

A_Trending_Pip_Count_body_chasrt_8_18_11.png, A Trending Pip Count

The approximate number of pips in each move to the downside, in the direction of the trend, is shown in green. The approximate number of pips in each move the upside, against the trend, is shown in red.

While we can definitely see that pips can be made trading counter trend, 4070 in this example, there is a significant difference in the number of pips earned by the trader who only took trades in the direction of the trend.

Based on this chart, trading with the trend in this example would have accumulated 3685 more pips, roughly 47% more, than a trader who only took counter trend trades.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.