Closing Price Reversal

A closing price reversal is one of the easiest patterns to spot. Price makes a new high/low but gets pushed back strongly and reverses, closing beyond the previous candle’s close.

In the chart below, of the EURUSD H4 chart, I indicated all CPR’s with an arrow.

If you traded in the direction of the overall trend, you would have made some nice money, as you can see. But even when taking ALL trade setups, out of 9, 7 setups would have reached at least 1:1, following the trading and money management techniques.

Just to show you these patterns work on all timeframes, take a look at the EURUSD 5M chart.

I bet you like what you see….. If you now understand you really don't need a whole lot of fancy flashing indicators in order to make an INSANE amount of money in the market, the goal of this strategy has been reached.

Naked Reversal

A naked reversal is based on nothing more than a trend line break.
It is a 2-step technique:

You first want to draw in a proper trend line. To do so, let me give you a proper definition:

UPWARD TRENDLINE:
From the lowest low to the highest low before the highest high, without cutting through any candle bodies.

DOWNWARD TRENDLINE:
From the highest high to the lowest high before the lowest low, without cutting through any candle bodies.

Also, you would want price action to touch your trend line at least twice, preferably 3 times, in order for it to be a valid trend line.
Once your trend line is on your chart, you wait for a candle to BREAK through that trend line. When this break occurs, you will look at the last candle high, higher than the high of the candle that broke through the trend line. That high will be your entry point.

Vice Versa for short.

• Wait for a trend line break to the downside
• Look for the last low, lower than the low of the candle that broke the trend line
• Place a sell order when that low gets broken.

Candlestick Pattern Dictionary

Secret Forex Hedging Strategy
How To Spot A True Reversal
5-Minute Moving Average Strategy
US Open Breakout Strategy
5-minute Bollinger Band Strategy
1-minute MACD Scalping Strategy