ADVANCED

REVERSAL
STRATEGY

WYSETRADE
ADVANCED REVERSAL STRATEGY

STEP 1 - IDENTIFY A LEVEL OF DYNAMIC

SUPPORT OR RESISTANCE ON THE WEEKLY
TIME FRAME:

We start on the weekly time frame so that

we know what is going on, on the big
picture. Without looking at the weekly time
frame you can get caught on the wrong side
of the dominant trend.

Why do we need to identify key levels of

dynamic support or resistance? Because if
price reacted to these levels in the past,
there is a possibility that price can react to
these levels again in the future so we need
to have them drawn in as a reminder once
price gets to these levels again.

After we identify and draw in our dynamic

level of support or resistance, then we move
to step 2.
ADVANCED REVERSAL STRATEGY

STEP 2 - LOOK FOR PRICE ACTION PATTERNS:

Once price gets to a dynamic level of support

or resistance we need to look for key price
action patterns to tell us that piece is
“actually reacting” to the level.

Without price action patterns occurring at a

dynamic level of support or resistance, this
means price is disregarding the level and
buyers and sellers are not taking action at the
level and we do not move onto the next step
without price action.

Price action patterns we like to see: long wick

candles, multiple candle rejections,
momentum loss candles, patterns & shapes.

Once we have identified a key price action

pattern at a dynamic level of support or
resistance then we move onto step 3.
ADVANCED REVERSAL STRATEGY

STEP 3 - TIME FRAME CONFLUENCE:

We want our directional bias on the weekly to

be the same as the daily (bullish bias or
bearish bias).

The reason for this is because if you have a

short bias on the weekly, but the daily is
showing bullish momentum, you have
conflicting data and can get caught on the
wrong side of a trade.

We first establish our bias through looking for

price action on the weekly that is either bullish
or bearish, and once we have that, then we
jump to the daily to see if we have a matching
directional bias.

Once we have confluent and matching

directional biases on the weekly and daily,
then we need to further confirm the direction
through the 4h time frame as the daily time
frame is 24 hours worth of data per candle and
we want to look deeper into the immediate
trend to see a more detailed representation.
ADVANCED REVERSAL STRATEGY

STEP 4 - INTRADAY CONFIRMATION & ENTRY:

The 4h time frame is the key to understanding

the immediate trend as it shows you exactly
how price is moving at that particular
moment. 

We then look for a breakout in the direction

of our daily and weekly bias and enter with a
stop loss behind some form of protection,
such as an intraday level of support or
resistance or behind a trend line, because
price can swing before it moves in our desired
direction and you don’t want to choke the
trade and have your stop loss hit before it
moves in your favour.