Price Bar Reversals (9 of 9) - The Pivot Point Reversal

http://www.YourTradingCoach.com - Price Bar Reversals (9 of 9) - The Pivot Point Reversal - Part 9 of a video series discussing short term price bar reversals such as the bearish rejection, the bullish rejection, the open close reversal, the closing price reversal, the hook reversal, the key reversal, the island reversal and the pivot point reversal.

Category:

Howto & Style

Tags:

• trading
• reversal patterns
• technical analysis
• charting
• candlestick
• price bar
• pivot point reversal
• bearish rejection
• bullish rejection
• open close reversal
• closing price reversal
• hook reversal
• key reversal
• island reversal

[damnutube2hell]

which chart doeS this work best in? 15 minutes? an hour? or daily?

[YourTradingCoach]

@damnutube2hell

Hi damnutube2hell,

Price action patterns are relevant on all timeframes and all markets, provided sufficient liquidity (ie. smooth price flow).

Cheers,

YTC

[beatthedealer]

It could be tested. Does it at least move one bar in your favor a majority of the time? See a carpenter could check the function of his hammer.

Cheers, mate. Check the pah-ern.

[YourTradingCoach]

@beatthedealer

Patterns are useless without context. The context (higher timeframe structure and current price action environment) will tell you the suitability of the pattern and the potential for the reversal to be either short-term influence or longer-term influence.

To continue your hammer analogy, a hammer is useful for tasks it's designed for, but useless when a saw is required. The context (building plans) will tell you when to use a hammer and when to avoid it.

YourTradingCoach

[beatthedealer]

The word "reversal" is to ambiguous for a serious discussion.

[YourTradingCoach]

@beatthedealer

Ambiguity exists in all market situations. The goal in learning to trade is not to seek certainty (it doesn't exist); rather it's to learn to manage risk and opportunity in an ambiguous environment.

YourTradingCoach

[beatthedealer]

Asking how well it's done is not only a correct question it's the best question. Good for you fonzi. Ahhhhhhhh!

[beatthedealer]

What's to stop the "reversal " from being a "long term" shift?

The word reversal means what the speaker wants it to mean, hence the problem. Vendors seem unfamiliar with the term ambiguous or they're actually masters of it.

[YourTradingCoach]

(response ctd...)

... If the short term change of sentiment does not lead to a long term reversal, a professional trader will identify this through lack of momentum, scratching the trade and ideally reversing.

Remember as well, these reversal patterns are not just useful for identifying long-term market reversals. A reversal pattern can signal an end to a counter-trend move, and a resumption of the original trend (ie. continuation, as you suggested).

Cheers,

YourTradingCoach