Reversal

P

progers82

Im do not use many indicators in my trading but, i was just wondering what indicators or combination of reversals do you use to help you indicate a reversal for the day or i could even say the high or low of the day.
pat
 
In a "perfect world", the daily extremes take place during the first and last hour of the session. In Market Profile parlance, it's called a "trend day". Another Market Profile item is to look for "long tails" on the intraday chart. The end of the tail is usually a daily extreme.
 
Knowing key MP levels is highly beneficial in the "where" to look for reversals also imo. I agree that a full understanding of "auction market theory" is fundamental to highly successful reversal area "picking" capability (if this is what you are attempting to optimize).

These last two weeks I had 4 very profitable SHORT trades off the 1336.00 level (one of my MP levels). I expected to see reactions at this price level (reversals or breakouts), so my radar was up each time price traded to the 1336.00 level. All 4 times that price level was met with a very clear "delta" divergence with delta shift for SHORT entry. I was able in my mind to take highly optimal "reversal" of price trades from the 1336.00 level, as I expect heightened price reaction at MP levels.....all 4 trades worked for good profits.

I use the MP levels to have an idea "where" reversals (or breakouts) may take place, and I use the delta to see if price at these levels has the heightened reaction (and gives me a delta based entry signal) to take trades from....kind of a one, two punch.

Here were a few of those 1336.00 level trades........

http://www.charthub.com/images/2006/09/15/ES_317_VB.png

http://www.charthub.com/images/2006/09/15/ES_317_VB_2.png

http://www.charthub.com/images/2006/09/15/ES_317_VB_3.png
 
When it seems to me that everyone wants to buy and I am the only one that wants to sell then I am probably looking at a peak reversal.

I rarely trade this way. It is only correct about 50 % of the time. Lots of times prices continue rising.

I find following the trend works just as well as selling the peak but the feeling of glory associated with selling the top is not there. So what. I trade for money not for glory.
 
I have read some of progers posts and I don't think he is the going for glory type.....he is looking for increased probability of set-up and there are ways to accomplish this imo.
 
Quote from rosy2:

key reversal indicator picked the top in gold. I think GCQ6
More...

Also occurred on a peak in oil, I think the Katrina top.

On the ES look for the 5min bar that makes new highs and closes below the prior bar. Add some filters/conditions to improve reliability and Bobs your uncle.

Looking very closely at volume helps me to judge reversals. Certain things I see over and over again that I cannot explain logically. The basic would be capitulation volume.
 
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