A Trend Following Contrarian Hybrid Trading Strategy

Creating a Hybrid Trading Strategy in Trading View

A hybrid trading strategy borrows from other trading techniques such as contrarian and trend following. This article shows an example of a trading strategy that uses both techniques to deliver signals.

Contrarian vs Trend Following Trading

A contrarian trading strategy is an investment approach that goes against prevailing market sentiment and trends. Contrarian traders believe that markets tend to overreact to news and events, leading to price movements that are not justified by fundamentals. They seek to profit from these perceived market inefficiencies by taking positions that are opposite to the consensus view.

A trend-following strategy, on the other hand, is an investment approach that aims to profit from identifying and riding prevailing market trends. This strategy assumes that markets tend to move in persistent trends, either upward (bull markets) or downward (bear markets), and that it is possible to profit by aligning with these trends.

Contrarian and trend-following strategies are fundamentally different in their approach to markets. Contrarian strategies aim to capitalize on market sentiment extremes and anticipate reversals, while…