Saturday, October 29, 2011

Trading Plan: Reversal at Prior Days High

There needs to be 3 highs on the 1 minute chart to have a valid reversal,
ideally the highs are lower indicating the beginning short trend:

If the reversal to the short trend happens on 1 min chart, you have to also observe where
the long trendline is, incase the reversal is just temporary you can then switch back to the long trend quickly:

Looking at the GOLD chart is pretty obvious that a REVERSAL
trade with the goal to enter a trend till a prior days low
has a very high risk reward factor, so if only 5 out of 10 reversals
work the profit factor will be much higher than for trend and breakout setups:


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