If the price makes a new high, but the oscillator (like RSI or MACD) makes a lower high, upward momentum is dying.
The short-term moving average crosses below the long-term moving average, signaling a macro bearish reversal. ⚠️ Risk Management for Reversal Traders chapter 8. reversal trading strategies
A three-peaked pattern (a high peak flanked by two lower peaks) that signals the definitive end of a bullish trend. 3. Indicator Divergence If the price makes a new high, but
A complete change in the direction of a price trend (bullish to bearish, or vice versa). Wait for a follow-through candle to prove the
Never jump in on the first counter-trend candle. Wait for a follow-through candle to prove the new trend is real.
Trading on reversals means entering the market just as a prevailing trend ends and a new trend begins. It offers massive profit potential by catching big moves early, but carries higher risk because you are trading against the immediate momentum. 🔑 Core Concepts of Reversals