Look for confluence, when trading a reversal

Confluence is very important in trading and means to have several (at least two) reasons to take a trade. Your 1st reason is the reversal signal bar/pattern and your 2nd reason can be e.g. support at HOY/LOY/COY, measured moves, trend line / trend channel line overshoot, buying/selling pressure, tick failure breakouts, breakout tests, a 2nd attempt to reverse and many more.

The success of your trade also depends a lot on trading style and stop loss (e.g. using a wider stop, than a bar stop), also on your ability to scale in.

This chart uses the Reversal Signal Bars and the Buy Sell Pressure indicator for NinjaTrader® 7/8.

Also check out this separate post about Reversals and the Blog for more examples on how to use Reversal Signal Bars in your trading.

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