Forex Chart Reversal Patterns Forex Trading Market
Forex Chart, Welcome to forex trading strategies, in this post we’ll go over how to trade trend reversals with one of the most common reversal price formations.
The pin bar once again keeps in mind that each strategy in this series will take time and practice to master so we suggest you take advantage of the free practice account in the trading forex platform.
In this post, you will learn what trend reversals are what benefits
trading trend reversals provide.
And where to place your stop to limit potential
losses and where to take profit when trading trend reversals.
What is a Trend Reversal?
A trend reversal is when the market changes direction and starts to move in the opposite direction.
An uptrend which is identified as a series of higher highs and higher lows reverses
into a downward trend by changing into a series of lower highs and lower lows.
By extension, a downward trend which is identified as a series of lower highs and lower lows reverses into an uptrend.
by changing to a series of higher highs and higher lows reversals can occur at any point.
And are generally difficult to anticipate but trading reversals can
provide an opportunity to profit from a new trend.
If the timing is right you will essentially be able to profit from the entire new movement.
And make significant gains looking out for
reversal patterns can also be beneficial as they can indicate the need for a
different trading strategy for instance.
What is a Pin Bar in Forex Chart?
The pin bar formation is one of the most common price action reversal patterns.
And the pin bar has a short body and a long wick essentially showing that for all the trading activity the price ends up very close to where it started.
So from this candle, we can see that the price went to a certain level and then came back near the opening price trading pin bars is convenient.
As you can easily identify them on the charts they show that the current trend has most likely run its course and is ready to reverse.
Continued till Next Post…