A reversal chart pattern is build up of 4 definable points, known as point 1, 23 and 4. A typical chart pattern is best traded after a strong currency pair up - or downtrend and can be defined by an easy set of trading rules.

A trader can confirm the reversal trade using a technical indicator such as DMI or MACD. The high in an up trending currency market.

A downward correction in the up trend, the lowest bar in the correction before the price moves back up to point 3. The high in the move up from Point 2 but a failure to make a new higher high Point 1.

Go short 1 pip below point 2.

The low in a down trending currency market. An upward correction in the downtrend, the highest bar in the correction before the price falls back up point 3. The low in the move down from Point 2 but a failure to make a new lower low Point 1.

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Go short 1 pip below point 2 Basic Rules for Long Trades The reverse is true when applying these basic rules for long trades but now: Go long 1 pip above point 2 Up Forex Reversal Strategy using MACD 1 Trade this reversal pattern only after a strong downtrend 2 Place points 12 and 3 on your chart 3 Place a BUY order 1 pip above 2 4 Confirm the trade using the MACD indicator or another ; the MACD must signal a buy or in buy mode already.

Calculate the distance between 2 and 3 ; if for example the distance between 2 and 3 is 50 pips, than 50 pips is your target level.

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Calculate the distance between 2 and 3 ; if for example the distance between 2 and 3 is pips, than pips is your target level. Download Forex Analyzer PRO For Free Download one of the best free fx systems for profitable forex trading!

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