Identify reversals and confirmation.
Step to identify the beginning of a reversal and making a decision for a trade.
1. Draw/mark the current trend based on HH/HL/LH/LL, and use the trend line at those points.
2. If the current price crosses the trendline, that's an early signal for a reversal.
3. confirmation of a reversal when the price breaks the structure/pattern (bottom/top).
4. After the above happens, the weighting of the position in the small timeframe (3m/5m) is
based on the larger timeframe (1H). For example, 1H reversal up and then 5m should look
for a buy signal/keep buy.
5. The distances of target for the buy condition must be limited in the supply zone=previous
higher high/lower high. Vice versa, a distance of targets for the sell condition must be limit
in the demand zone=previous higher low/lower low.
6. you can combine with other measuring tools such as stochastic or RSI. The example here uses
Trend Circle Divergence (TCD) based on RSI, wave of momentum, EMAs, and MACD.
*Please refer to the chart below for in-depth information and analysis.
How do reversals happen and identify appropriate positions?
Price action/movement, patterns, and their effects
1. Draw/mark the current trend based on HH/HL/LH/LL, and use the trend line at those points.
2. If the current price crosses the trendline, that's an early signal for a reversal.
3. confirmation of a reversal when the price breaks the structure/pattern (bottom/top).
4. After the above happens, the weighting of the position in the small timeframe (3m/5m) is
based on the larger timeframe (1H). For example, 1H reversal up and then 5m should look
for a buy signal/keep buy.
5. The distances of target for the buy condition must be limited in the supply zone=previous
higher high/lower high. Vice versa, a distance of targets for the sell condition must be limit
in the demand zone=previous higher low/lower low.
6. you can combine with other measuring tools such as stochastic or RSI. The example here uses
Trend Circle Divergence (TCD) based on RSI, wave of momentum, EMAs, and MACD.
*Please refer to the chart below for in-depth information and analysis.
How do reversals happen and identify appropriate positions?
Price action/movement, patterns, and their effects
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