A Technical Approach To Trend Analysis: Practical Trade Timing for Enhanced Profits

Reversal in Western Patterns

In periods of consolidation—just like all moments in a stock chart—you have to rely on the strength of reversal signals and confirmation from secondary signals. The Western technical signals used by so many technical traders can be used by long-term investors, too. However, knowing which signals are applicable to swing trends and which are applicable to primary or secondary trends is a considerable challenge. You need to determine how compelling a set of signals is before deciding that a primary or secondary trend is reversing. The likely reversal points often rely on proximity to resistance and support, the points where reversal is most likely.

Key Point

Reversal can occur at any point in the current trend, although ...