Trading against the Herd.... Contrarian Strategy

I watched “Prediction by the Numbers” on Netflix last night and kept thinking about this thread (which I’d seen earlier in the day yesterday).

1 Like

Kepp at it mate.

FWIW, it seems to me the slope of the 50EMA is just over 60% reliable as an indicator of price’s direction for the following week.

At this point, many traders are going to say 60% is not much more than random and add another indicator. I’ve done this myself. Anyone would think that two 60% reliable indicators would give better results than one. In reality, each additional indicator drives the resulting reliability down, not up.

(An edge of 60% is way way better than the casino’s margin in roulette.)

That is really interesting!

I know this isn’t the place but I’ve been using adx as well and will post some screenshots in my journal would be very interested in your feedback and @Trendswithbenefits.


I’ve never used ADX. The thing that troubles me about my decision on this is that Connors & Raschke rate it pretty highly in one of the “Street Smarts” strategies. Those two are not dim.

1 Like

I don’t use the green and red plus minus crossover I simply use the indicator line.

I’ve built a strategy based on sentiment from IG sentiment data on the major crosses that has proven to work well. Built my own indicator in excel using the data.

Keep it up!



Gbpcad and gbpaud are great shorts

Just using MYFXBook Data…

XAUUSD - London Open… 61% Short, 39% Long… Price jumps up 30 pips…

GBPJPY - London Open… 79% Long, 21% Short… Price jumps down 25 pips…

At the very least this may help play into the London Open game…

Just two that I have checked…

Nice. My GBP/JPY short triggered a little earlier.

Hey KC… Wilder’s ADX (or DMI) has only come to my attention since @dpaterso mentioned it in a post a while back… I knew of it, just hadn’t had a good look at it… I use the Vortex Indicator which is very similar, without the averaging line…

I just find the Vortex a little clearer for signal and a few of my bots confirm using the signal… As can be seen from the example below…

(Above GER30-DAX Daily - 14 Periods)

I have set the Periods to 14 for comparison only, to trade it I would use 6 - 9 which gives earlier entries and exits if managed properly…

But each to their own… it’s what you prefer, from what I have learned since I researched the ADX, it is as good if not better for Currencies than the VI…

1 Like


That’s really interesting, I’ll have to check it out. I’ve been using only the ADX average line. It seems to indicate amount of tremendous activity at Lows and peaks and sometimes minimal activity at Lows and peaks giving an indication of possible direction or what is happening in the market. I still have a hard time with a naked chart .

I’m away from home with the family, posting can be a challenge. When I get back I’ll put up some screenshots of what I’m using in my journal.


1 Like

Correlating the data from Dennis’s SW Thread, Strong Weak Analysis wins again

GBPCAD 8% Short - 92% Long… Price fell 84 pips … Confirm

GBPNZD 14% Short - 86% Long… Price fell 68 pips… Confirm

This strategy appears to be more powerful on the less popular lower volume pairs…

1 Like

Oddly enough the dude from No Nonsense says and shows exactly that i.e. on the major pairs the correlation with these reports is not as clear cut and easy to interpret as it is on the less popular crosses.

1 Like

Let’s try a Mixed Sample, and see if we can apply some probability to today’s London open

(Above) USDCAD - SSI displaying - 12% Short / 88% Long | (Demo) | 40 pip Short TP / 20 pip SL

(Above) EURCHF - SSI displaying - 16% Short / 84% Long | (Demo) | 40 pip Short TP / 20 pip SL

(Above) EURJPY - SSI displaying - 16% Short / 84% Long | (Demo) | 40 pip Short TP / 20 pip SL

Hit their marks or ALL to be closed 1 hour after London open… result posted…

Results are in…

USDCAD went nowhere +1 pip | EURCHF -8 pips | EURJPY -12 pips = -19 pips across all three

Have to get clear data release information, some pairs are updating others appear frozen in time…

Will develop this theory offline… but at this stage… continue to throw a dart… and roll those dice…

Interesting Finding! Proof of only minority win in the market.

Just found this indicator wanted to pass it along…

Trying it out now with the contrarian trading - S/W analysis that @Trendswithbenefits mentioned a few posts back.


1 Like

Howdy K @frandlost … Thanks for adding this Indicator to the thread… The use of a larger cross reference of Brokerages, should make the information displayed by the Indicator more compelling.

Cheers & Staysafe

Apparently that indicator has a demo subscription period. However, they do offer a free “lite” version that is for the specific pair being traded and is based on IG’s information on the Daily FX site. It doesn’t include all the other brokers as the “pro” version.

Fell prey to poor judgement and entered long on the GBP/CAD. This was a number of days ago. Trying to anticipate and “up move” rode the elevator into the basement.

.01 positions.

Entered additional positions in the basement in conjunction with the SSI Lite indicator and @Trendswithbenefits, I have to say I could see the buy/sell see/saw unfold. Majority was short and I went long. It was enlightening. Have taken $$ off the table as I’m riding the elevator back up toward profitability.

1 Like

I had a number of .01 trades on (GBP/CAD, NZD/JPY, AUD/CHF) in an LMFX micro account. Part of my analysis was using the lite version of the short/long position indicator posted above. Holding long when the majority was short.

Just closed all positions for a net gain. Small numbers since open but a good percentage gain overall…
@Trendswithbenefits I’m still finding that I’m trying to anticipate “the turn” and have to be patient and wait for the XLV4 MA signal. What I have been doing is if it goes against me is sit tight and get in at a better level once it’s found support. Even at this point I am still “jumping the gun” a bit.

I have to do a better job at using ATR for pending order placement and SL/TP. Having a mental block on how to do this properly.

@Lang15 has a great video on this I will have to review.


1 Like