Reversal Signals and Confirmation
Overview: Reversal does not always refer to a change from bull to bear or vice versa. Those are price directions. Reversal may also mean a reversal of the existing trend to a different trend, to or from consolidation. This form of reversal is most easily identified and spotted through subtle but important changes in momentum.
Given the many ways in which reversal signals appear and combine, how much do you need to make a well-timed trade? The answer lies in confirmation. Many correlations in signals and how they can be employed are often based in momentum. Some observations concerning the nature of reversal:
- Strength in trends leads to strength is reversal signal. The greater the momentum is in the ...
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