When is the right time to enter the reversal pattern?

The reversal pattern is a classic opportunity with a high winning rate. Generally, more reliable patterns include: double top-bottom, triple top-bottom, head-shoulders top-bottom, round top-bottom, and V-shaped top-bottom. However, if the V-shaped top and bottom are in new highs or new lows, it is more difficult to enter the market, unless there are other ways to judge that the top and bottom are about to come out; but if it appears in the first three reversal patterns (double, triple, head Shoulder), the profit of participating in it is very considerable, and the timing of entry is no different from the previous form.

So when is the best time to enter these reversal patterns ?

This is actually a matter of strategy formulation. On the one hand, it depends on the level of the reversal pattern; on the other hand, it also needs to be combined with the cycle of its own operation; finally, it is necessary to formulate strategies based on each person's personality and risk preference .

First of all , it should be noted that when these patterns are about to form, the winning rate of entry will be relatively high after there is a weakness or divergence. After all, no matter what the top or bottom is, you can break through. If you keep guessing the top and bottom in a strong trend Enter against the trend, then you will experience what is called "egg pain"......

Then , it depends on the level of the reversal pattern. Generally speaking, the higher the level, the more effective it is. That is to say, the reversal pattern of the monthly line is more reliable than the weekly line, the weekly line is more reliable than the daily line, the daily line is more reliable than the 4H line, and so on.

Then , it depends on the level of your operation. If you are operating at the level of 1M and 5M, it is not very meaningful to look at the monthly and weekly levels. Generally speaking, the level of the reversal pattern and the level of your operation should not exceed two levels, which will be better. For example, if you operate at the 4H level, you can combine the daily and weekly reversal patterns. Of course, if you can watch the monthly line and operate 1M every day, that's fine.

Finally , it is to formulate a strategy that suits you according to your own personality and risk preference. Each of us is different. Some people are more risk-tolerant and would rather take more risks than lose opportunities; Strategy. Therefore, you cannot generalize, the one that suits you is the best. In general, it is generally divided into the following categories:

One, it's almost ready to enter the venue early

We often see that the reversal pattern is still some distance away from the previous high or low, and it will be reversed if it is unable to charge again. Therefore, some people will enter the market early because they are afraid of losing the opportunity. This requires a relatively large risk. Remember that the stop loss must be set outside the previous high or low to be more reasonable.

Second, enter the venue as soon as you are in place

That is to say, enter the market as soon as the price reaches the previous high or low level, regardless of whether it will break through or not. Anyway, if it breaks through, stop the loss. After all, this is only a matter of probability. In many cases, the top and bottom are about to come out, and the market will not give many opportunities to enter the market. Even the top and bottom prices appear instantly, and there is no time to enter the market manually. Only pending orders can be traded. For example, on the last trading day of 2013, the golden weekly double bottom, the left bottom was around 1180, and the right bottom dropped sharply to around 1181, 1182 and was pulled up instantly.

3. Enter the market after a reversal K-line pattern or a weak K-line pattern appears

For example, a reversal pattern of the daily line can be divided into the following three situations:

1. The K-line closing line of the daily line has a reversal pattern or a weak pattern to enter the market again.

At this time, the certainty of entering the market is relatively high, but there are also disadvantages, that is, more space will be lost, which means that there is more room for stop loss.

2. The 4H K-line closes in a reversal pattern or a weak pattern to enter the market again.

Generally speaking, for the reversal pattern of the daily line, it is more appropriate to wait for the reversal pattern of the 4H K line to enter the market or a weak pattern; As soon as the price swallows the previous K line, but has not closed the line, you can enter the market or enter the market in batches.

3. The K line of 4H has not yet closed the line, but the K line of 1H has entered the market in a reverse form.

This kind of entry risk will be a little higher. Sometimes although the 1H K-line shows a reversal pattern, the price will withdraw when the 4H K-line closes; however, the advantages of this entry are also obvious. That is, the stop loss is small, and the entry point will be better.

One thing that must be emphasized is that no matter what kind of form, it is not 100% successful, so you must do a good job of defense at all times, and you must strictly stop losses as long as you break through effectively.

So how can we determine whether it is an effective breakthrough? Generally speaking, as long as it breaks through 30 points, it can be regarded as an effective breakthrough.

However, 30 points has been very effective in the past few years. Now I feel that the market has changed a bit. Sometimes it will break through 30 points before reversing. So now sometimes I will use 40 points to define whether a breakthrough is effective. You can refer to Take a look and grasp it yourself.

Of course there will be false breakouts from time to time, so take this into account as well. If the false breakthrough is less than 30 points, the stop loss position has not yet been reached, just hold the position; and if it breaks through 30 points and then draws back and turns into a false breakthrough, in this case, it usually only needs to withdraw past the previous high or previous low 30 points, you can re-enter. Of course, many people stop trading as long as they stop the loss, it depends on personal preference.

Grasping the entry timing of the reversal pattern will undoubtedly improve our ability to make profits in trading. If you formulate strategies clearly and form rules, your level will rise to a higher level. As long as you practice and adapt repeatedly, you will be able to master it. I hope You are helpful.