There are many ways to trade reversals, they boil down to three choices:

  1. Trade in anticipation of the reversal…highest risk.
  2. Trade at the first sign of a reversal…Still a bit risky.
  3. Trade after a reversal is confirmed…Least risky.

Each has its own set of advantages and disadvantages. Because I have used my method of trading for so long, and have so much confidence in it, I often choose the highest risk – not because I want more risk, but because, if I am right, the reward is much better.

And quite frankly, my method is so good at predicting reversals that I consider it to be less risky to anticipate reversals than most other traders.

And I do one other thing that sort of hedges my bet.

My method is good at predicting the reversal, but occasionally underestimates the market momentum and price goes further before turning than I anticipated. So, I often enter my anticipated reversal trades with a position that is half what I usually trade. Then, if price goes up to next level of resistance after I enter the market, I can with a high degree of safety, double the position. I can add the other half after I am confident that price is in reversal.

This procedure is not for the faint of heart – do not try it unless you have considerable confidence in you trading system.

If you are interested in why I trust my method so much, check out book on Amazon, SEE THE MUSIC OF THE MARKETamzn.to/2uGqehZ.

 

 

 

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *

Comments Protected by WP-SpamShield Spam Blocker

See the Music of the Market

The unique trading method that is Trading Between the Lines