How Do You Draw Reversal Chart Pattern?
A reversal setup is a pattern that suggests the current market trend might change direction when the pattern is finished.
A reversal setup signals that the strength of the current trend is weakening. If this reversal pattern is confirmed, the market trend may shift and begin moving in the opposite direction.
If a reversal pattern forms in an upwards trend then traders should wait for the pattern to be confirmed before opening trades in the opposite trend direction. Once a reversal pattern is confirmed by the price moving below the support level of the reversal pattern then traders can consider this bearish reversal pattern to be confirmed signaling that the market trend has changed from an upwards trend to a downward trend.
In a downtrend, wait for reversal patterns to confirm before going long. Confirmation comes when price breaks above the pattern's resistance. This shift signals the trend turning up, not down.
Interpret Bullish Reversal Pattern
Interpret Bullish Reversal Chart Pattern
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