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A Trend Reversal A Trend Reversal occurs when there is a Body Reversal of the last Trending Candle that was defining the current trend. If the BR is caused by a TC then we have a trend-change from up to down or vice versa. The new trend-stop level will then be the opening price of the Trending Candle making the Body Reversal. If the Body Reversal is caused by a candle that is not a Trending Candle then the trend changes to neutral. A new trend starts with the appearance of the next TC that follows.
The example above shows that the principle is NOT sensitive to time. Only when the price has made a sufficient move do we get the reversal. |
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