Counter attacks are one of the basic methods of defense for Batman and is the other move of two that continues the FreeFlow combo allowing chains. Simply press the Counter button when an enemy target is about to attack Batman. When an enemy is about to attack Batman, their heads will light up in BLUE in alert (does not appear in Hard Mode in Story Mode) indicating you to Counter. Depending on the situation of how the enemy attacks, Batman will usually grab or block their attacks, and even respond back with another attack of his own. Counting attacks is one of the basic requirements of the combat system to continue lengthy combos without being interrupted when an enemy lands a hit.

Can be used as a Variation Starter: YES
Counts as a Hit: YES
Counterable Attack
Un-Counterable Attack
In Normal and Challenge modes, you will receive an indicator to Counter in the form of an alert indicated by blue streaks appearing above the enemy's head who is about to attack. Sometimes these streaks will instead be red. This means the attack coming in cannot be countered, and should be avoided. In Hard Mode, these indicators do not appear, but the rules of what can and cannot be countered still apply.

Counterable attacks are as follows: Unarmed attacks, and Pipe Swing attacks.
The following attacks cannot be countered: Knife Strikes, Stun Rod Strikes, Thrown Objects, Titan Attacks, and Gunfire.