A reversal is not created on a day or two. While many new traders will look at a chart and see it as ‘overbought’ or ‘oversold’ market conditions but these two terms are rather a part of Emotions being Involved rather than any other defining reasons that a trader can work on for better trading opportunities.
There is a lot that goes into a top or bottom forming that can generate worthy trading opportunities, But how a trader can benefited from them as they rarely occurs on higher time frames and most of the Corrections don't ever turn into big time reversals.
Short term reversals can be a part of too much expectations as they are never a part of weekly or monthly chart. A true reversal requires ally or Collective Institutions feel same for the change in environment. Complete Change in Sentiments requires everything to fall in place and it is quite rare.
First, the fundamental backdrop must change on multiple higher importance news events by way of a significant surprise to the upside or downside. In an uptrend,The key point to be made up front is that reversals are more rare than we give them credit for and the small corrections, less than a reversal where multi-week lows are made in an uptrend, often aren’t worth trading. Therefore, when we believe a correction is turning into a reversal, we need to be skeptic and prefer trend continuation.
Lets take a look at few of the ingredients that need to accomplished to call a reversal or continuation in trend .
Usd/Cad update Close trade For +150 Pips.
Strong Ride as Expected, Not expected such a quick run.
