Reversal pattern candlestick

Capturing trending movements in a stock or other type of asset can be lucrative.

Reversal trading strategy pdf

However, getting caught in a reversal is what most traders who pursue trendings stock fear. A reversal is anytime the trend direction of a stock or other type of asset changes. Being able to spot the potential of a reversal signals to a trader that they should consider exiting their trade when conditions no longer look favorable.

Reversal signals can also be used to trigger new trades, since the reversal may cause a new trend to start.

In his book The Logical Trader, Mark Fisher discusses techniques for identifying potential market tops and bottoms.

While Fisher's techniques serve the same purpose as the head and shoulders or double top/bottom chart patterns discussed in Thomas Bulkowski's seminal work Encyclopedia of Chart Patterns, Fisher's methods provide signals sooner, giving investors an early warning of possible changes in the direction of the current trend.

One technique that Fisher discusses is called the "sushi roll." Wh

forex reversal indicator

how to spot trend reversal in forex