REVERSAL BARS
Reversal bars are an objective technique used to time the entry of a trade. When pattern, price and time all come together at a suspected major pivot, and you hesitate while wondering if the prior trend will continue against your new position, a reversal bar can be the mechanical trigger to take action. The examples demonstrated below have many variations. The example given is not the only possible configuration for that reversal bar type. The important concept is that with every possible configuration, prices make a new high (or low) and then close opposite the direction of the open. The trend for that time frame has run out of gas and no new money is coming into the market. For bullish reversals just substitute low for high.


CONTINUATION BARS
Not every major pivot point is marked by a reversal bar. Continuation set-ups can still get you in a trade relatively close to the pivot point.

Continuation bars should be used in conjunction with other techniques to add a little more evidence that the trend is likely continue in the direction of the continuation bar trade. Continuation bars have even more value if the breakout point is an Elliott Wave 3. This will position the trade for what should become the most explosive segment of the move.

 


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