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.

Reversed Pivot Top / Bottom

Pivots are a common pattern used in several trading systems. A pivot bottom shows that price has found a level of support. A pivot top on the other hand shows that price has found a level of resistance.
Let’s have a closer look.

The easiest way of trading pivots is assuming the support/resistance level they indicate will hold, and therefore the prices will reverse.

A common way of trading this would be to enter the trade at the close of the pivot confirmation candle (the third candle of the pivot pattern), with your stop at the pivot high/low.

Let’s have a look at the following EURUSD H1 Chart. It is an average Chart from last week, not cherry picked.

Every Green line represents a trade entry, stop loss would go at the pivot low/high indicated by the arrow. Depending on your money management, out of 15 trades, in the picture below at least 12 trades (I circled the arrows) would turn out to be winners. Not bad for 2 days worth of trading….

Failure Swing Top / Bottom

Failure swings are my favorite pattern. They are a clear sign of the inability of price to reaffirm a new high in an uptrend or a new low in a downtrend, which gives us the opportunity to spot a trend reversal before most do.
This is what they look like:

As you can see, this pattern is as simple as 1 - 2 – 3, but VERY powerful. A very common way of trading failure swings is trading the breakout of Point 2, with your stop loss above Point 3 when going short, and below point 3 when going long.

2 Bar Reversal

The 2 bar Reversal identifies a possible trend reversal.
The first two bars must trade in the same direction and be trending bars. The third bar reverses the trend direction by taking out the low of the second bar (for short) or the high of the second bar (for long).



The Bearish 2 Bar Reversal

1. Bar 1 has a higher high, higher low and a higher close.
2. Bar 2 has a higher high, higher low and a higher close than bar 1.
3. Bar 3 reverses the trend by trading below the low of bar 2.





The Bullish 2 Bar Reversal

1. Bar 1 has a lower high, lower low and a lower close.
2. Bar 2 has a lower high, lower low and a lower close than bar 1.
3. Bar 3 reverses the trend by trading above the high of bar 2.


How To Trade the 2 Bar reversal
Bullish 2 Bar Reversal:

•  Buy 1 pip above the high of bar 2
•  Place your stop loss at the low of the breakout bar 3.
• 
  

Bearish 2 Bar Reversal:

•  Sell 1 pip below the low of bar 2
•  Place the stop loss at the high of bar 3.

Below is a EURUSD Daily chart. It is obvious this system has the possibility to get you into swing trades at the best possible level.