Advanced Reversal Strategy

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STEP 1 - IDENTIFY A LEVEL OF DYNAMIC SUPPORT OR RESISTANCE ON THE WEEKLY TIME FRAME:.

We start on the weekly time frame so that we know what is going on, on the big picture. Without looking at the weekly time frame you can get caught on the wrong side of the dominant trend.

 Why do we need to identify key levels of dynamic support or resistance? Because if price reacted to these level s in the past , there i s a possibility that price can react to these levels again in the future so we need to have them drawn in as a reminder once price get s to these levels again.

 After we identify and draw in our dynamic level of support or resistance, then we move to. step-2

STEP 2 - LOOK FOR PRICE ACTION PATTERNS:

Once price get s to a dynamic level of support or resistance we need to look for key price action patterns to tell us that piece is “actually reacting” to the level.

 Without price act ion patterns occurring at a dynamic level of support or resistance, this means price is disregarding the level and buyers and sellers are not taking action at the level and we do not move onto the next step without price action.

 Price action patterns we like to see: long wick candles , multiple candle rejections , momentum loss candles , patterns & shapes .

 Once we have identified a key price action pat tern at a dynamic level of support or resistance then we move onto step 3. 

STEP 3 - TIME FRAME CONFLUENCE: 

We want our directional bias on the weekly to be the same as the daily (bullish bias or bearish bias ).

 The reason for this is because if you have a short bias on the weekly, but the daily is showing bullish momentum, you have conflicting data and can get caught on the wrong side of a trade.

 We first establish our bias through looking for price action on the weekly that is either bullish or bearish, and once we have that , then we jump to the daily to see if we have a matching directional bias . 

Once we have confluent and matching directional biases on the weekly and daily, then we need to further confirm the direct ion through the 4h time frame as the daily time frame i s 24 hours worth of data per candle and we want to look deeper into the immediate trend to see a more detailed representation.

STEP 4 - INTRADAY CONFIRMATION & ENTRY:

The 4h time frame i s the key to understanding the immediate trend as it shows you exactly how price i s moving at that particular moment .

We then look for a breakout in the direct ion of our daily and weekly bias and enter with a stoploss behind some form of protect ion, such as an intraday level of support or resistance or behind a t rend line, because price can swing before i t moves in our desired direct ion and you don’t want to choke the trade and have your stoploss hit before it moves in your favour.
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ENTRY CHECKLIST:
STEP 1 - IDENTIFY A LEVEL OF DYNAMIC SUPPORT OR RESISTANCE ON THE WEEKLY TIME FRAME:.

• Are we at a key level of support or resistance
• Is the level obvious ?
• How many reject ions of this level ? ( the more the better)
• Was it recently respected?
• Has it acted as both support and resistance?
• Is i t an extreme swing high or swing low? Meaning is it at the highest or lowest point price has reach in recent  time?
• Evidently you don’t need all of the above but the more criteria you check off the better and higher quality the dynamic level is . 

STEP 2 - LOOK FOR PRICE ACTION PATTERNS:

Price action patterns to look for :

•  Long wick candles
•  Multiple candle
•  rejections
•  Momentum loss candles
•  Patterns & shapes : triangle, wedge, double bottom, head & shoulders , etc.

STEP 3 - TIME FRAME CONFLUENCE:

To do: 

• Check the weekly again for your directional bias (bullish or bearish)
• Check the daily for your directional bias (bullish or bearish)
• Is the weekly and daily directional bias the same? 
• Only if both time frames are the same do we go to the 4h time frame

STEP 4 - INTRADAY CONFIRMATION & ENTRY:

Ask your self:

• Ask your self:
• What i s the directional bias we have on the 4h time frame? 
• What price act ion pat terns do we have?
• Does the 4h directional bias match the daily and weekly directional bias ? 
• If all time frames are confluent look for a momentum breakout and enter