Trend reversals in price action

Up to now you should have learned the specific features of price action trading in trending markets and trading ranges. Trading with the underlying trend, however, does not last forever. Eventually there will be indications that the market is reversing its direction and it is extremely important that a price action trader detects them on time and position himself/herself in the most appropriate way.

In this final chapter of our Price Action Trading guide you will become familiar with terms such as actual reversals, reversal targets and tests, reversals, following “spike plus trading range” formations, minor and major reversals. We shall also discuss in which cases patterns fail and what common mistakes traders make. Last but not least, in this chapter we provide some general advice on what you need to do if you are aiming at a successful career as a price action trader.