The vast majority of methods touted on market forums and trading blogs are centered around trend based strategies. There is not as much literature on trading methods that are focused on countertrend approaches. In this lesson, we will define and discuss the basic elements of countertrend trading, and present some best practices and strategies for implementing such strategies in the market. Countertrend Trading Defined Countertrend trading is a contrarian trading approach, wherein a trader seeks to profit from price moves that run counter to the prevailing trend. Countertrend traders typically fade the trend in an attempt to catch a short-term price retracement or possibly a trend reversal. Generally, countertrend trading strategies tend to be intermediate-term in length. More specifically, countertrend swing traders seek to hold positions between a few days to a few weeks. Now, there are also a class of short-term traders that trade countertrend strategies and for whom this timeframe does not necessarily apply. These day traders and scalpers may be in and out with their countertrend techniques within a few hours or by the end of the trading session. Regardless, the underlying premise of countertrend trading can be understood as being the opposite to a trend following methodology. Whereas a trend trading style focuses on momentum breakouts and riding a trend for as long as possible, a contrarian or countertrend style often calls for locating potential reversal points within the larger price movement. The mindset of a trend trader is very much different than that of contrarian trader. Both styles of trading can prove to be profitable in the right market environment, and when it aligns with a trader’s personal psychology and makeup. Based on a more technical definition, trend traders seek to locate and participate in impulsive price moves, while countertrend and mean reversion traders seek to find critical turning points to take advantage of corrective price movements. Impulsive price moves as described within the Elliott wave theory, is a scenario wherein the price action is moving along in the direction of the larger trend. And conversely, corrective price moves as described within the Elliott wave theory, describes a scenario wherein the price action is moving along in a direction that is counter to the larger trend.