Reversals

A reversal is a genuine change in a market's prevailing direction — an uptrend becoming a downtrend, or vice versa. This article defines a trend structurally (higher highs and higher lows, or lower highs and lower lows), shows how a reversal is the breaking of that sequence, and tackles the hardest problem in all of price action: telling a real reversal from an ordinary pullback. It closes on why reversals are only ever confirmed in hindsight, and why 'catching' them is where so many go wrong.