Thread by @ThiccTeddy

HOW TO TELL THE DIFFERENCE BETWEEN A PULLBACK & A REVERSAL🔮🔮

This thread will help you find REAL reversals & avoid getting faked out

🧵👇

Reversal trades are one of the most lucrative trades due to the potential for a large move, which makes them an attractive type of trade

Many traders will chase reversals without knowing how to evaluate the bounces/rejections

Lets change that

This thread is just an appetizer

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I'll post sign up instructions tomorrow (8/28)

Basics

We will be looking for strong reactions paired with favorable volume to indicate a real & strong reversal

A weak reaction paired with unfavorable volume indicates this bounce/rejection could be weak & fake (a pullback)

Strong Reactions (Reversals)

When price bounces or rejects, we want it to be swift and strong. That means an immediate move paired with a strong candle close in favor of your bounce/rejection

These reactions show urgency & ability to move the price

Adding Volume

Volume is the second piece of this puzzle. If we see high relative volume on the bounce/rejection, we know this move is strong and likely real

High volume shows the sentiment creating the bounce/rejection has real volume to continue this reversal

Weak Reactions (Pullbacks)

These occur when price spends a lot of time within a possible reversal area, or price retests that reversal area multiple times

This shows a lack of urgency, which shows that price might not be ready to reverse

Adding Volume

Again, volume is the second piece of this puzzle. Reactions can 'look' strong but have low volume. In that case the reaction is not actually strong

This shows us that the reversal is not backed by volume AKA real buying/selling orders. It's fake

How To Play Strong Reactions (Reversals)

When I see a strong reaction supported by volume I always wait for the candle to close before I enter

Once I have entered I prefer to put a stop loss above or below the resistance or support that caused the reversal

Strong vs Weak Reactions ✅
Add Volume ✅
How To Play Them✅

Final Thoughts

-You can use this for any type of support/resistance
-IT WON'T WORK EVERY TIME
-Volume is the key piece here. We want REAL orders to support the reversal
-The more a 'key' level is tested, the weaker it becomes
-Think of these reactions as buyers vs sellers

I HOPE YOU GUYS ENJOYED THIS THREAD!!

Volume Camp is next week & I think all of you should join. Anna Coulling will be making an appearance. 10+ hours of volume education. Less than $20

KEEP GRINDING. I LOVE YOU ALL