Series 3: 6.2.3.1. Reversal Patterns

6.2.3.1. Reversal Patterns

Reversal patterns require the existence of a previous pattern. If prices have shown no sustainable trend for some time, there is nothing to reverse. The longer the previous pattern has been active, and the larger its price movement has been, the greater the potential for a reversal. Reversals are usually accompanied by high-volume trading and take a long time to develop relative to continuation patterns.