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 selling to buying.
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 buying. If it is overbought, there is a possibility of a trend change, but in other cases, if it is a daily or weekly buy, the whole flow should definitely move in the buying direction.
Wait until 40-70% return from the most recent rise
The chart below is an hourly chart of the Australian dollar yen in December 2021. The part surrounded by the blue frame is the point where the price increased significantly, but it increased by 130 pips from 82.5 yen to 83.8 yen. Please wait until the sale comes about 40% to 70%. If it goes up before the sale comes, please wait until about 40% to 70% of the sale comes. If you make an entry after going up, you will have a fairly tight unrealized loss due to the buyback that comes after that. Therefore, please be sure to wait until the sale comes.
Find the inversion point
When a sale comes, it starts to rub at a certain point in 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. The sale back will be a big hidden line, so I will aim for it after that. After entry, watch over, if it goes up smoothly, it will be successful, and if you have updated the latest low price, 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 you come in the positive line of strong repulsion, it will be a sign of rising.
If you have been rubbing all the time
If you have been selling and buying for more than a few hours, the selling will often win. As shown in the blue frame in the figure below, it has been hung for hours, but once it has dropped by about 20 pips. After that, it rose after the upper beard appeared in the same price range. After that, it has increased by 100 pips.
If you go the other way
There is a high probability that the trend will shift downwards rather than fully return. The pattern can be as shown in the figure below, so if you sell back 80% or more of what you lost, consider two options.
- Switch your eyes and follow the bottom (entry for sale).
- Give up the entry by buying 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 a downtrend to an uptrend, 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 lows.