Counter-Trading: How Trading World Champions REALLY make their money

Counter trading, my lovely strategy. But most people are not confident with it because they have not the calm to wait for the perfect entry and they would like to have big hit rates. With counter trading you have to choose the numbers, the real mathematics you have to need to understand and to choose this way of trading. But this is the best way of trading for myself and also for a lot of people in my company, like.

Patrick Trick, like Search.

We love it because the numbers are so big. If you have good trades, if it is interesting for you, listen this video, I think you will love it. To understand very deep what are the numbers, the rules of this way of trading. I translated this video with AI. My English is not perfect, but it will be better and better and I.

Think you will love it. Counter trading so what am I actually talking about here? Counter trading, Breakout trading, Intraday swing trading. I've already introduced you to a lot of strategies here and the question is always when do you use which one? And with counter trading you first need to know that for one thing, you have to be more patient because that means when a market rises and takes time to do so, it usually also takes more time for the market to turn around again. That's because at the top there isn't an imbalance, it's more of a waiting situation. The second thing we need to identify in a counter trade is of course to see whether the big players are still treating the prices up there fairly. Then things get tight. But if liquidity decreases, or rather if there is significant absorption up there, then the probability that the market can turn becomes much higher. And now comes point three, at which locations then at which points should I even be looking for counter trades? And that's exactly what we want to take a look at together today so that we can summarize these three points and the fourth point, which setups come into play. And this too is a very essential and important component to see when I should enter the trade. Last but not least, risk management. With counter trades, you don't have such a high hit rate, but you do have a wonderful risk reward ratio. And that's what we live on in counter trading. So you have to be willing to be patient to stick it out and especially to have gathered enough experience to know that this strategy is effective for you. Otherwise it's very, very difficult to implement. And now I'll show you the rest on the chart. So let's go through it in the correct order. Let's go through the whole thing. The first thing we always do is look at the trend Structure. And the major trend structure is this one, which you can see very clearly. This is how it currently looks. These are the current prices. That means for me, this is the course of the chart for now. And when I see it like this, I can tell that the market is basically trending upwards. But what do we do and what is interesting for us, for us, it's much more interesting to look at what the structure of the market looks like. And then I see last week here and up here I first see strong selling pressure, so a real selling tail. And I see that the market has its value area down here and the corresponding vpark. That means the equilibrium is here. So in the first big picture, there was rejection at the top, first indication. The possibility for shorts is there. But we have to be cautious because the overall big trend from the weekly profile is still long for now. So what do we see this week? You can see it beautifully. The market is moving back and forth this week as well. We have been moving sideways so far and now the question always is, what does sideways actually mean? Sideways means that supply and demand are in balance. And when supply and demand are balanced, the market will always try to return to that equilibrium. And that means, for me, I can definitely look for short trades up here and long trades down here. And I'll keep doing that until either the big player here or the big players here decide that the market will continue to go long and we move back up here or this big player here will prevail. The one who already showed up here and said, I'm here. And that's why the market drops below here and starts to repair things first, naked POCs and everything else that comes with it. So what do we do now during the day trading? In day trading, we can now do the following. For example, we can analyze the previous day and we see, okay, up here the market was in balance, but the closing price was really low down below. And at the end of the trading session, we also had what's called a single print. That means there was a strong sell off at the end of trading. That's usually not quite the fair value because we can clearly see here the fair prices were up above. But now let's move on to the day that's interesting for us and take a look at what reaction levels we have. And I can say quite clearly, look here is yesterday's value area low and maybe that's where the VPOC is first in terms of price range. If I see that the market is below that, then I can definitely try a short Trade, Why? Because we are in this price segment here and I know that the market is currently moving back and forth in balance. That means I can look out for a counter trade here. As we know, counter trades take time. And now there are two ways to trade this price area. I'll sketch it out over here so we get a better overview. The first is, let's assume here, this blue sequence is what we're trading here now. Now there's the possibility that the market moves up here. No one is interested anymore in accepting these higher prices here. I can observe that using the footprint chart, but I can also simply look at it using B and P structures. And now I say, okay, here is a B profile. And that shows me that there is weakness in the market. So first I have the information that this is where I need to look for a counter trading setup. And secondly, I'm now also being given the setup itself. Alternatively, of course, I can look at the footprint chart with the corresponding conditions. Finished auction, unfinished auction, everything that goes with it. There are many, many, many ways to get there. But in the end, there's only one essence that's important to me and that is, is the seller up there or not? So what's the next thing I can do now and should do? I can plan where the market will go if I get my setup here. And then I can immediately see, all right, somewhere down here. Why? Because down here, as I had already identified, the market is currently moving sideways. The bigger picture, it's playing sideways. So I clearly make the specific connection between this profile and something else as the main driving force and this path that I initially expect from this main driving force. And with that, I have a very clear idea of where the market could go for me now. Now let's take a look at how this plays out in the best case scenario. Afterwards, I'll also show you what it looks like when things don't go so optimally. I've already drawn it out for you up here. The value area from the previous day. And what happened then? Now it gets interesting at the market open, the market dropped down here and immediately showed me, okay, there's selling pressure present. What did it do then it moved down and then went back into acceptance. Lets remember, whenever a market returns to a balance area, there's a high probability that it will accept it again. And that's exactly what happened. So the trend did not continue. That means, and this is really important, if we had already entered the market here, we would have been stopped out, plain and simple. That's just the truth. But now let me jump back for a moment. Look, variant two. And this is always the most pleasant scenario happens when the price action unfolds like this. And there's a pullback to my setup because I waited patiently. That approach is even more effective for me. So how do I handle this pullback? Let's take a look at that. I can wait for the market to make a pullback. It returns again to this price area of the value area. We have to remember that was our location and that's the absolute alpha. We need a clear price area where we expect a rejection because we assume that the big market participants will trigger a reaction there. And now comes the good part. Now comes the proof for us. Here is the proof it gets sold off again and we get a lower balance. That means from the PBD logic, we now have an opportunity here to enter the market. If you're really good, if you can look up here, then you can probably already see up here that the liquidity is leaving. Take a look at the volumes down here. You can already see there's nothing going on. During this entire market phase, not much was happening. Now the sellers have come in and suddenly volume is coming in. You can already see who's currently moving the market. It's definitely the sellers. And when I see that, that's cool for me because I can clearly and confidently conclude that this movement now is driven by bigger money. And now I have the opportunity to trade the market for myself either through a break in or a. And here too, if I had entered very quickly, I might have ended up taking another stop loss because the market simply moved higher again. But if I patiently wait for the right setup and know how to read the conditions, then I know exactly where I need to enter. And now comes the all important part. And that's what's great about counter trades. With counter trades I always have to rely on the math. And the great thing is, and I want to illustrate this together with you, let's assume this here is our value. This is the value area here. All good. Now if I can trade dynamically, I have the opportunity up here to enter the market with a setup, possibly using dynamic concepts. But what is much, much more important, the next price area I was able to identify to the downside was 140. That means 140 is down here. So for me that means I have from 320. Up to 140 my context idea. That means for me I enter here and I want to get down there. That's the Plan I'm putting together for myself for now. And that means from a mathematical perspective, I now possess this range here. This allows me to plan and strategize for this substantial profit. Of course, very few people can actually endure that. And why is that? I can tell you very clearly because it takes time. Especially when you enter up here. You can see that with this pullback it takes a lot of time until the market decides to go down, until it gives you proof that there is really pressure here. And now I have the opportunity to see the acceptance of lower prices here as well. But just take a look at this. Now the market has moved down from here and is giving me a very clear structure here. And this structure should be evaluated in such a way that I know if we move back above this level, then I have a problem with my short position. And now I say here, for example, is a really great entry point. If I didn't get the breakout here, why is that now here at 260 I have the opportunity to take my entry. And now comes the great part. Even if I take the entry at 260, I have a much higher hit rate than if I take it here because I have proof that the market tends toward weakness. Now it gets even better because now I can plan from 260. My next target is 140. So I have 120 points that I can plan for. Mathematically speaking, that's my opportunity. The next thing I can plan is where should my stop loss be? Now? Let's just say if the market were to go back above here, then my stop loss would be at 305, for example. That means let's assume 305 would be my stop loss, which by the way can be set much tighter depending on the setup. Then I can already see, okay, my risk is 45 points. So if my risk is 45 points, which by the way, I really don't feel like taking on in DAX trading. But even if you haven't fully grasped all the depth, all the dynamics, maybe even the setups and everything in perfect detail, you still have a clear piece of information. And that information is the following. I can now calculate what my risk reward ratio is. It's very simple. 120 is the number of points I want to achieve divided by 45. And if I divide 120 by 45, I get exactly 2.66. That means my risk reward ratio for this trade is currently 2.66. What does that mean? It means that, for example, if I take this trade and my Overall strategy has a hit rate of 40%, then it's absolutely feasible to take this trade because Even with a 40% hit rate, if I really have to set the stop loss that wide, I can definitely take this trade because the probability that I'll win is extremely high. I can gladly talk more about that later about the math and how to calculate all of this. I'll make a separate video about risk management for that. But for me, the following is much, much more interesting. As an active day trader, I now have the information that I should be looking for a short trade up here. I know that with this setup, my stop loss doesn't belong up here, but rather here. That means my stop loss is suddenly only 20 points wide. That means, for instance, to illustrate this point, if I secure my initial profits at a risk reward ratio of precisely 3 to 1, then I quite clearly have 20 units, then 40 units, then 60 units, and continuing in that progression and so on. I can clearly calculate from which point onward where is my strategy maximally profitable, even before it has reached down here. So I can fragment and pick out several trades here, if I look at it on a smaller scale. And here you simply have to make a distinction. And I want to make this very clear for everyone. Are you a, the trader who uses these counter trades just to trade from A to B, then you have a lower hit rate? Or are you perhaps be the type of trader who thoughtfully says, I use this fragmented approach to go from point A to point B with multiple setups, for example, to trade my trades in this direction until I reach the bottom. Then first you have more trades and second, a higher hit rate for the individual trades. But for that you absolutely have to divide your setups that are suitable for short trades into counter trend continuation or break out. And this is exactly where the wheat is separated from the chaff and where unfortunately a lot of people keep going wrong. I can definitely recommend that you do the following. First, use the opportunity to enter up here and exit down here. Do this with 200 to 300 trades. It's very easy to plan ahead. You can also backtest this and then you will realize that even with a hit rate of 30 to 40%, you have an average risk reward ratio of greater than 3 and you will be incredibly successful mathematically with this approach. But unfortunately very few people manage to stick with it. And that's why counter trading is often difficult for many people. Well, I hope you enjoyed this video. If you did, leave me a like and let me know if you want more of this. I think that's cool. And yes, I'm already looking forward to sharing more great ideas with you so that you can continue on your path as a trader in the best possible way. Thank you very much.