Reversal System Theory

Versatile for All Time Frames

Introduction

The Reversal Trading System uses linked If-Done orders to manage positions. This system is suitable for both daily and weekly charts, providing traders with reliable entry and exit points.

How It Works

Setup

Linked If-Done Orders. When the Stop Buy Order is triggered, a Stop Loss Order for double the number of shares and the initial stop is automatically placed. This will reverse the number of shares for the case where the price moves in the opposite direction. When the Stop Loss Order is triggered, a Stop Buy Order for double the number of shares and the initial stop is automatically placed. This will reverse the number of shares for the case where the price moves in the opposite direction. The position can be reversed only once, the stop levels remain identical. The reversed position receives a new liquidation order for the entered number of shares. This liquidation order can be placed only via If-Done order.

Initial Stop

The previous entry price

Trailing Stop

The stop is pulled to the low (high) of the body of the respective candle after each profit candle, until the position is reversed.

Timing

The system works best in times of high volatility.

Characteristic

Profitable trades are entered in a sideways market. Best suited for a trending market. Low transaction costs are also necessary.

General Trading Advantage

The position size can be used in any other trading system by doubling the initial number of shares. This ensures that the trade is “reversed” and thus takes the correct position.

Loss Brake

After 2 consecutive losses, the system is blocked for the applied timeframe. The same block applies to the traded base value.

Note: This system provides clear entry and exit rules, making it suitable for both novice and experienced traders.

System Highlights

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Conclusion

The Reversal Trading System is more than a set of rules; it is a comprehensive trading framework that integrates technical analysis, psychology, and rigorous risk management. It equips traders with the knowledge and tools necessary to navigate the complexities of the market, maximizing opportunities while controlling risk. By applying this system, traders of all experience levels can enhance their market presence, making informed and profitable trading decisions.