Overview
"I'm going to cover the eight reversals that I think that can be effectively traded with consistency"
The Eight Reversal Types
- Trading Previous Day Highs
- Trading Previous Day Lows
- Intra-Week Highs
- Intra-Week Lows
- Intermediate Term Highs
- Intermediate Term Lows
- New York Session Reversals
- London Close Reversals
1 & 2: Trading Previous Day Highs & Lows
Previous Day Highs - Bearish Reversal
"we're looking for opportunities where the market will blow out the previous high or previous day high specifically raid the buy stops and then reverse and trade lower"
"there's certain criteria that I like to look for there are instances that will lead you to seeing opportunities by rating the previous day's lows sell stops and rating the previous day's high for buy stops not every previous day's high or low is the same in terms of an opportunity"
Criteria & Banking Levels
"when I'm looking at the previous day's High there's buy stops above that previous day's High there's banking levels there's intraday algorithms that go up to those previous day highs and down to those previous days lows to seek liquidity that would be resting below or above it respectively"
Crown Jewel: Expansion Swings
"this is the kind of like the crown jewel of this particular teaching during expansion swings there are smaller retracements that typically create opportunities where the previous day's low is rated then price rallies higher in opposing expansion swings there are retracements that create opportunities where the previous day's high is rated than price declines"
Always Refer to Last 3 Days
"every single trading day you should always refer to how price traded today after the close in relationship to the previous day's range did we work the daily high or the daily low of the previous day or the day prior to it or the day prior to it so what you're doing is you're always referring to the last 3 days counting today as one day"
Previous Day Low - Bullish Reversal with Fair Value Gap
"when I'm looking to trade the previous day's low and I'm anticipating higher prices in this example you can see price was moving higher as a part of a larger expansion swing and during a normal retracement lower into a fair value Gap price finds buyers under the previous day's low"
"what you're looking for is a move down below the previous day low and also into a discount array like in this case it's a fair value Gap price trades under the previous day's low that's where you're going to find buyers the Market's going to come in with a great deal of institutional sponsorship and they'll send price higher intraday"
Previous Day High - Bearish Reversal with Premium Array
"trading previous day highs I like to look for reasons to see price move up into a short-term premium array and then having and like we see in this example here price was moving lower as part of a larger expansion swing during a normal retracement higher after a fair value Gap was filled notice the Gap has already been filled but after that Gap has been filled price finds sellers above a previous day's high"
"this candle here trades above its previous candle when price trades above that previous day's High the market finds Sellers and you can be a seller that day"
3 & 4: Intra-Week Highs & Lows
Intra-Week High - Definition
"the intra week high where the market trades above the highest high it's made for the week so far raids the buy stops and then reverses"
Coupled with Higher Time Frame Premium Array
"what I like to do is look for scenarios where the market has already been trading for instance higher for a period of time and we have yet to meet a premium array that eventually gets traded up to say maybe on a Tuesday or Wednesday or Thursday and it hits that on that particular day but it also does it on the heels of running out a previous in week high"
"once that higher time frame premium array is traded to it's coupled with buy stops that will be resting above for instance Tuesday's highs"
Tuesday False High Blown Out Wednesday
"many many times Tuesday can create a false decline or false high and then Wednesday will come up here and blow it out and then that's the high of the week"
Equal Highs - "Candy Land"
"when we look for equal highs we know that that is like Candy Land as we call it it's very easy to see that retails going to have their buy stops resting just above that and any rate above it 10 or 20 Pips above it will scoop up those buy stops"
Blending with New York Reversal
"we have a Tuesday high and in Wednesday had a slightly lower high but it's basically equal highs we know there's going to be buy stops above that so on Thursday price rallies above it at that time it could also be seen as a New York reversal so you're blending a couple different things"
Intra-Week Low - Definition
"the lowest low on the week be violated on the downside and the sell stops be rated and the market reverses"
Blending with Previous Week's Range
"you have equal lows on the previous Friday and on Monday so those two equal lows are traded down through on Tuesday violating that old low so you have an intra week low that can be Blended in with the previous week's range as well especially if the reversal occurs on a Monday or Tuesday"
5 & 6: Intermediate Term Highs & Lows
Definition - Longer Time Frame
"intermediate term highs now this is going to be a little bit longer term it may be a high of the previous week or a week before it so it's going back a little bit more in terms of time"
Run Above Old High, Raid Buy Stops
"what we would be looking for is a run above an old high basically and those by stats that would be resting above that old high they would be rated and the market reverses"
Storyline Required - Context Critical
"this can be a little bit tricky because the old highs and old buy stops that would be resting there or just above it you have to look at the the context of the marketplace at the time what's the storyline behind why price would be permitted to trade above that intermediate term High yes they're looking to take those buy stots but there's a storyline behind it is it pairing up those orders to go into an exit of Longs or is it going up there to engineer liquidity to put people on the wrong side of the marketplace and then go lower"
Ideal in Consolidation/Range-Bound Markets
"in this chart here you can see price is trading in a large validation and the periods when the market is not trending One Direction they offer ideal conditions you know for shorting above an old high and buying below an old low from a previous week or longer in time"
Old Highs/Lows Are "Gold Mines"
"old lows and old highs like that they're gold mines because think about who would be having their stop losses below or above those reference points the whales those large f fund Traders when they have their orders in those markets they're going to be placed around these higher time frame highs and lows so if the market trades back to them they're gunning those stops"
More Reversal Opportunities Without Directional Trend
"when the market lacks directional Trend and one-sidedness those conditions they offer more opportunities to trade like this"
7: New York Session Reversals
Default: New York is Continuation
"when we look at New York session generally it's a continuation the characteristic of New York I like the view first and foremost is it's a continuation generally of what was already established in London if London was a bullish rallying making the low of the day that means I'm going to be in first looking for signs that there's a continuation on that move going higher from New York's open going into London's close"
"time of day highs or lows formed in London the opposite end of the range and London close forms New York is generally continuation rarely will it become a reversal in New York"
Reversal Conditions: Higher Time Frame Premium/Discount Array
"there are instances where that if London created a low of the day or what would be initial low of the day it rallies up and goes into New York but then New York reverses and goes lower and then you end up having a lower close on the day that occurs when the markets trade into a higher time frame premium array in this case as I was outlining"
"or the reverses scene if London starts trading lower creates the high of the day then New York creates the low of the day reverses and ends up closing higher on the day"
"times when it reaches its higher time frame PD that's when you anticipate that New York session becoming a catalyst for reversal"
Weekly Templates Determine Likelihood
"when we look for New York session reversals obviously the first remind yourself is that the weekly templates that I provided in earlier teachings this is going to provide you the basis for studying current market structure and then also learning to anticipate what the New York session is going to do in terms of continuation or reversal"
Most Likely at Discount Array on Higher Time Frame
"in simple terms when we see price trade down into a discount array on a higher time frame chart and it does it at the time New York opens that is when the most likely chance of a market reversal occurring in New York session is going to be seen"
Default to Continuation Unless at Premium/Discount
"unless the New York session opens up at a premium array on the higher time frame or discount array on the higher time frame New York will always be expected to be a continuation of what was seen in London"
8: London Close Reversals
Two Types of London Close Reversals
"London close everything I just mentioned for New York session reversals applies to London close but also intraday obviously on large range days"
Type 1: Intraday Scalp on Large Range Days
"when we have a 5day average daily range that's exceeded when we get into 10:00 at 11:00 in the morning New York time you can anticipate a London close reversal for an intraday scalp where price will want to come back a certain measure of that range"
Requirement: 125% to 130% of ADR
"I like to only do it when the average daily range of the last 5 days has been exceeded at least 1 and a/4 to 1 and 13% in other words if it's 100 Pips ADR I want to see 125 Pips or 130 Pips like that or more"
20% Retracement of Total Daily Range
"London clothes can be used for intraday reversals on large range days for scalps the large range day that exceeds its 5-day average daily range tend to retrace about 20% of its total daily range at 10:00 in the morning to noon New York time"
Must Be Explosive One-Sided Move
"I don't like to do that type of trade when the range is smaller than the last 5 days average daily range or if it wasn't really explosive the better trades are when the market has a real big extrapolation one-sided and it moves a lot real quick then in London Clos you generally get a lot of profit taking on an intraday basis and you can see some retracement of that total daily range"
Type 2: Secondary Swipe After New York Reversal
"there are times when you anticipate the New York session causing the reversal and then later on London will go back to that higher time frame PD and blow out the stops on the New York session as you see here in this example so always be mindful that even if you're expecting the New York reversal London can come back"
"in London open you expect a high the form it creates a high it trades down 30 40 Pips aggressively and then it comes back one more time knock those stops out and then it sells off well when we're expecting New York session reversals the London close can be that second swipe"
"for those the individuals that are really on the right side of the marketplace and they're buying the reversals in New York or selling the reversals in New York London clothes can many times go up there one more time or down there below to knock out those stops for those people that were right anticipating the New York session reversal"
Re-Entry Opportunity - "Wicked Low Pricing"
"if you see that occur step right in air again and buy it below the New York low if you're looking for a bullish New York session reversal if it comes down again in in London I'll step right back in there again and buy it again and many times you'll get really wicked low pricing and it quickly moves away the other way"
Turtle Soup Core Concept
False Break Above Old High or Below Old Low
"it's the concept of turtle soup which is a false break above an old high or false break below an old low but it's one step further than that"
Context: Expansion Swings
"during expansion swings there are smaller retracements that typically create opportunities where the previous day's low is rated then price rallies higher in opposing expansion swings there are retracements that create opportunities where the previous day's high is rated than price declines"
Judas Swing Connections
"these reversal concepts are large in scale with intermediate based ideas as what I'm descri describing here but it also is minute to the point where we can reduce it to the London open for Judas the CME open for the New York Judas and Asia it has its Judas at 8:00 and then New York time or zmt Z GMT and then you have it also in London close on days that create London clo reversals"
London Open Judas Swing
"the Judah swing when we're looking for Bears moves it's going to be rallying higher what we're doing is trying to time that intraday reversal"
Four Judas Swing Timing Windows
London Open Judas"the London open for Judas" (10:51)
CME Open (New York) Judas"the CME open for the New York Judas" (10:53-10:56)
Asia Judas"Asia it has its Judas at 8:00 and then New York time or zmt Z GMT" (10:56-11:02)
London Close Judas"you have it also in London close on days that create London clo reversals" (11:02-11:06)
Study & Review
Click each card to reveal the answer (direct transcript quotes with timestamps)