(binned per thread starter’s request) Improving on Reversal Strat

Hey guys so some of you might know me from my SDTR threads which was based on trading reversals, and a large majority of trading strategies are based on trading reversals trying to get in as early as possible on a new trend.

There are many approaches to confirming a reversal using indicators like Oscillators, pivots, EW, MA crosses, Zig Zag, TDI, etc, but at some point in a strong trend they can fail. Many times the indicators you are using to confirm reversals can show a reversal, but later on turns out to be a fake reversal or a pull back before the continuation of the main trend making your trade a loss. Most work pretty well some of the time, but not all of the time.

My question is how can we improve on reversal based trading strategies to filter out those situations when there is a pull back or continuation of the main trend? What other methods can we introduce to improve the probability of success trading a reversal based strategy?

I'm open to all ideas and suggestions and hopefully with more great minds thinking together we can come up with some good suggestions that can help improve reversal based trading.

Now as this is a trading discussion it goes without saying that I will not tolerate any arguing or bickering among members as is the case that happens to many threads here and get derailed. Those that can't participate in a respectful friendly manner will be removed. We are all adults here so lets all behave like adults.

That being said there are some smart, educated, intelligent members here and I look forward to the discussions on improving on reversal strategies.

Green pips to you all!

have you considered htf divergence? when that happens a reversal is very likely to happen.

I will say that I'm not so clued up when it comes to divergence, its never really been something I've looked in to or traded, but if you think it could help can you post some examples?

the ONLY places to look for a "possible" reversal are the price extremes, either high/low.. then and only then you can go on with the proper price analisys/indicator "confirmation" and see if its a valid "reversal" taking place..

Otherwise you are just trowing darts in the night

Here you go

let me know if you have any questions

https://www.youtube.com/watch?v=TmrkQ-MBs78&t=1835s

i hv been trading with the Alien system.
We use Adx, rsi and dds to monitor reversal
most of the time we check peak formation of rsi and dds values and chem 1m adx
also there are several methods of dds+rsi compression of all time frames. 1m to 4h
then there is a high possibility of big reversal.
but for retrace , pullback we prefer to look 1m to 15m comprehensions of dds, rsi and ADx ..

Ok and what do you use to look for and confirm price extremes?

Thanks Coughz I'll check it out.

a price extreme its just the highest/lowest of a given "period" lets say.. weekly high or low for example; its only a place where you could start to look for signs of a possible exhaustion/reversal taking in place by reading the price and maybe support that analysis with a good indicator.. its like the step 1, the ONLY place on the chart to look for valid/strong reversals/start of a price impulse in a direction

Price always tell you want it wants to do, just let it speak it to you =)

Look for a123 reversal pattern with the third move breaking the market structure with a strong momentum candlestick. Better at an htf. Then wait for a pull back that retests the broken level for a role flip.

Trade safe.

KP

sometimes im trading reversal but only on D1 TF... im looking for hot zones,,, such as weekly support and resistance and also those fibo's level. then, im waiting for 2 candles formation in daily TF... if the trend is downtrend and reach my hot zones or the fibo level.. i want to see a candle that closes above the highest point of the previous candle. if uptrend,, its the other way around. this is all naked trading but if you confluence you can use RSI o stochs to see if its exhausted already.. you also use divergence to add as confluence.

one example is this... dusted trade.

this is another example. the first trade got me stopped out.. but the 2nd and 3rd trade gave me some profits. the support zone was identified on weekly TF.

as you can see my stochs is also at the exhausted level.

this example is showing that this strategy of mine also have some flaws like you see i got one lost trade and im sharing this because i want to improve it or fine tune it.

What I've implemented before is, trade time and pair choice. Seems to help a ton for certain strategies. I hope this is somewhat helpful.