This is how I define a reversal

[grantx]

I dont try and play reversals but when I see certain patterns occurring Im on the lookout for opportunities.

What can get traders in a lot of trouble, especially when leverage is applied, is when they disregard the big picture and mistake a small correction for a reversal so that when the trend resumes and they’re trying to pick a top or bottom, they’re holding the trade against the trend.

Ask yourself (in the case of a reversal on a downtrend):

Is this downtrend worth a reversal trade? Firstly we need to see a substantial change to the downtrend theme, key intermediate levels of support on this chart need to be broken so that you can enter with evidence and confidence that a reversal is underway. Should you get stopped out you need to re-evaluate whether this is a trend continuation idea or a true reversal.

two examples below:

Or this one:

This is my way of doing it, there are probably a million other ways. Hope it helps.

[GerhardtW]

I dont try and play reversals but when I see certain patterns occurring Im on the lookout for opportunities.

Actually, you are using the failure swing method. When price penetrates the previous high in an uptrend or the previous low in a downtrend you go long or short respectively.

[JJToday]

I never had much luck trading reversals using a similar method to this. There were too many fake outs and I needed quite large stops which required a fairly big trend.