How to Trade Reversals (Catching the Turning Point)

Reversal trading is about identifying exhaustion in a trend. It offers the highest risk-to-reward ratios but requires extreme patience and precision.

Look for Trend Exhaustion

Watch for signs like Divergence (Price making a higher high while RSI makes a lower high) or shrinking candle bodies.

Do not sell an uptrend until the price makes a "Lower Low" on your timeframe of choice.

Confirmation often comes in the form of a Head and Shoulders, Double Top, or a massive Engulfing Candle.

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