Putting the Final Nail in the Coffin: Trend Reversal Trading
Overall Stats from beginning of trading across all accounts
Trend Reversal
Trend Continuation
Futures
Trend Reversal
Trend Continuation
Shares
Trend Reversal
Trend Continuation
Webull Options
Trend Reversal
Trend Continuation:
Why does this strategy NOT work?
Trying to capture the first wave in a reversal is very difficult because you are essentially buying on the wrong side of the "V"
Where is the best time to buy on this chart?
How do you know when you are at the "B" entry?
When does this strategy work?
IF and only IF, the Micro is the main driving factor for the reversal
Example:
Pullbacks and Pushes
Trend Reversal trades will fail 70% of the time but there are certain periods where they actually are very likely to win. The problem comes with the fact that it only occurs when we hit the micro bottom trendline. When we hit that, we have strong momentum back to the upside while being stuck in a large pullback. When the trend reverses back long we should expect those moves to be met with buy demand.
Examples:
Macro Downtrend, Micro Uptrend, Intraday Downtrend: Trend Reversal Long (tradejournal.co)
Micro Uptrend and Trend Reversal Longs (tradejournal.co)
How do I solve the problem of never doing trend reversals until they are a high +EV trade?
1. Never Short above VWAP never Long below VWAP while pushing in upper bounds of the micro trend.
How do I catch these trades when they are high +EV?
1. Only take them when we are in major pullback to micro trendline.
2. Only get 1 chance. Never multiple.
3. Only can trade this in the direction of the micro trend. Never against.