All reversal signals are deemed POTENTIAL reversals until price action of the next one or two candles after the reversal signal confirms the reversal.
Reversal signals may be CONFIRMED MANUALLY by a simple method described below or CONFIRMED AUTOMATICALLY using the Trend Reversal Signals drop-down menu.
To manually confirm a potential bullish reversal, the close of the 1st or 2nd candle following the reversal candle must be greater than the high (wick) of the reversal candle.
To manually confirm a potential bearish reversal, the close of the 1st or 2nd candle following the reversal candle must be less than the low (wick) of the reversal candle.
To use automated confirmation capabilities, select either "1-Candle Confirmed" or "2-Candle Confirmed" from the drop-down menu.
Selecting "1-Candle Confirmed" will result in any potential reversal signal (R) updating to a faded/transparent reversal signal (R) if not confirmed by the next candle only.
Sometimes there is market indecision (i.e., sideways price action) after a potential reversal signal takes place, requiring the use of a 2nd candle to confirm the reversal.
Selecting "2-Candle Confirmed" will result in any potential reversal signal (R) updating to a faded/transparent reversal signal (R) if not confirmed by the next one or two candles.
Play the probabilities and avoid fake-outs: IGNORE any reversal signal not confirmed by the above method.
Use the color selector boxes to change the bullish and bearish reversal signal colors.
Always practice risk management: Use proper position sizing and a stop-loss on every trade.
* This tutorial is intended for educational purposes only.
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