![]() ![]() This shape stems from the market condition that at the start of the bar, sellers overwhelm buyers and drive the price down. This structure is reversed for a bearish reversal bar. StructureĪn ideally shaped bullish reversal bar has its open around the middle of the bar, a tail at the bottom that is at least one-third of the entire candle, and a close that is at or near the high. However, when they are shaped well, have an appropriate size, and occur in certain locations relative to the prior price action, they are consistently one of the best indicators. Most times, though, a reversal bar is not a reliable stand alone signal, and should not be used as the basis for a countertrend trade. The occurrence of a reversal bar indicates that traders drove the price in one direction but were over-powered by traders taking positions in the other direction and a trend reversal might follow. A bullish reversal bar has a close near its high, and a bearish reversal bar has a close near its low. A reversal bar on a candlestick chart is any bar with a tail on one end and its close near the other end. Learning how to trade Emini S&P trend reversals is time well spent. ![]()
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