As is common to all stock Forex cryptocurrencies, anyone who knows the buy-to-sell reversal point and the sell-to-buy reversal point can live almost 100% as a professional trader. The initial selling and buying from the reversal point is very strong and it is also the most delicious point because it can take a large price range. Today’s article takes Forex as an example, but it can also be applied to trading stocks and cryptocurrencies, so it should be useful for a wide range of trading. The article focuses on the reversal point from buying to selling.
Check the direction on a daily or weekly basis
First, let’s take a look at the daily and weekly charts. Make sure the overall direction is towards selling. If it is sold too much, there is a possibility of a trend change, but if it is not sold daily or weekly, the whole flow should definitely move in the selling direction.
Wait until 40-70% return from the most recent decline
The chart below is an hourly chart of the Australian dollar yen in January 2022. The part surrounded by the blue frame is the point where the price dropped sharply, but it fell by 160 pips from 83.7 yen to 82.1 yen. Please wait until about 40% to 70% repurchase comes. If it falls before the repurchase comes, please wait until about 40% to 70% of the fall is included. If you make an entry after it has fallen, you will have a fairly tight unrealized loss due to the buyback that comes after that. Therefore, please be sure to wait until the repurchase comes.
Find the inversion point
When a buy-back comes, you will start to wear a beard at a certain price range at the same price range. Please wait 30 minutes until this point comes. It can be said that this worried point is an important point regardless of whether you win or lose. This is because buying and selling are the points where a fierce offense and defense is carried out with a power balance of 50:50. If you get a point like the red frame, you have an entry chance. After entry, watch over, if you drop smoothly, you will succeed, and if you hit the latest high, give up and drop your position. Slowly moving currency pairs such as USD / JPY, AUD / JPY and EUR / USD can see this trend even on an hourly basis. GBP / JPY, GBP / USD, etc. are very active, and the trend is quick, so we recommend 30 minutes.
If Chart has been rubbing all the time
If you have been selling and buying for more than a few hours, the buying will often win. As shown in the blue frame in the figure below, it has been hung for hours, but once it has risen by about 20 pips. After that, it fell after the upper beard appeared in the same price range. After that, I dropped 130 pips.
If Chart goes the other way
The probability is low, but it is possible to go the other way. With a pattern that returns like a V, there is a high probability that there is a high probability that the trend will shift upwards rather than all. The pattern can be as shown in the figure below, so if you buy back 80% or more of what you lost, consider two options.
- Switch your eyes and follow up (entry by buying).
- Give up the entry for sale and see the situation once.
Effective when used in conjunction with trend change
In the article I introduced earlier, I wrote an article about the transition from an uptrend to a downtrend, but it is easier to work with this method. Of course, always specify a stop-loss point when you do it. Try to escape after updating the latest highs.