Now That’s What I Call a Reversal!!
Reversals can be dramatic in trading. This one stood out clearly. Price shifted sharply after exhaustion. Volume price analysis (VPA) spotted the turn early. It’s a textbook example of market change. A terrific session on the US markets as the plunge in equities during the morning, was reversed in the afternoon with an equally strong recovery, with the three sister indices all closing on the day with an extreme wick to the lower body and a close near the high of the session. A fantastic trading day and one with many VPA lessons, not least the importance of understanding the relational aspects of market behaviour of bonds and currencies all of which sent clear signals of this change in sentiment.
Key VPA Signals in the Reversal
Volume price analysis revealed classic signs. High volume at the extreme showed distribution. Stopping volume appeared as buyers stepped in. Divergence between price and volume confirmed weakness in the old trend.
Why This Reversal Matters
Reversals like this reward prepared traders. Quantum indicators on NinjaTrader or MT5 highlight them fast. The Trend Monitor and Accumulation/Distribution tools flag the shift. Anna Coulling’s VPA methodology makes spotting them reliable.
Now that’s what I call a reversal—high conviction and clear signals. Use Quantum tools to catch the next one confidently.
How to Trade Reversals: Patience Required, But Rewards Are Bigger with Early Entries
Reversal trading is one of the most rewarding strategies in forex, stocks, or futures. It lets you enter early at market extremes. This captures big moves. But success demands patience. Wider stop losses are needed. Volume price analysis (VPA) spots reversals reliably.
Why Reversals Offer Bigger Rewards
Reversals happen at trend exhaustion. Entering early means better risk-reward. You catch the full new trend. Momentum traders join later. But false signals are common. Patience avoids traps. VPA confirms true turns—high volume at extremes shows conviction.
Key VPA Reversal Signals
VPA reveals exhaustion:
- Stopping Volume: High volume halts decline—buyers absorb selling.
- Divergence: Price new low on low volume—weakness.
- Climactic Volume: Ultra-high volume at extremes—reversal likely.
- Accumulation/Distribution: Indicator turns positive at lows.
Quantum indicators on NinjaTrader or MT5 highlight these. VPOC marks reversal zones. Trend Monitor flips on confirmation.
The Role of Patience and Wider Stops
Reversals need room to develop. Early entries face pullbacks. Wider stops (beyond VPOC or swing) protect against whipsaws. Patience means waiting for volume confirmation—no chasing low-volume spikes.
Example: EUR/USD new low on low volume. High volume bounce—long entry. Stop below low. Target previous high. Reward often 3:1 or more.
Practical Reversal Trading Tips
- Use higher timeframe for bias.
- Lower timeframe for entry on volume signal.
- Avoid news extremes without confirmation.
- Anna Coulling’s VPA approach rewards waiting. Quantum tools make spotting reversals reliable.
Reversal trading requires patience. But early entries deliver bigger rewards. Wider stops manage risk. VPA with Quantum indicators turns extremes into high-probability trades.
Master reversals for consistent results. Quantum tools provide the edge.
By Anna Coulling