How to trade counter trend. Using buyer/seller failure to pick tops and bottoms.

I have a rule that about 90% of my trades are trend trades, and around 10% end up being counter trend (major trend) positions. Basically, I only spend 1/10 of my trading trying to pick tops, bottoms, reversal points, or whatever you want to call it.

The MOST IMPORTANT thing of counter-trend trading is your stop management. A counter trend trade is an "attempt" at being the first wave of the new trend. This new trend can end up being a pullback (retracement) or an actual new major trend formation; it's impossible to know until it develops.

Anyways, my main rule for counter-trend trading is "keep your losses very very small and have reasonable targets". In a trend trade you have the market "behind" your position, but trends eventually come to an end / stall out. There is only ONE thing I look for when attempting a counter-trend trade, Buyer/Seller FAILURE. What this means is that if I'm looking for a long trade in a short trending environment, I wait until I see seller failure at lows and then take the long trade; I let the massive selling go by, wait for sellers to fail at a point and then take a long with a very tight stop.

Here's an example, the risk starts out very small, 5 pips. The target zone on this position is around 30 pips away, great risk to reward situation. I know that I am taking an attempt, so getting stopped out will not be shocking. BUT, once I get positive movement in my favor, I eliminate risk completey and let the trade play out. This is what it looks like live: