Strategy Concepts - Kase Key Reversal

A key reversal bar pattern is a simple two-bar pattern that may help identify the short-term reversal of a trend. A ‘Key Reversal Up’ pattern starts in an uptrend (Figure 1), the pattern is complete when prices hit a significant higher high and then close lower than the previous bar close. A ‘Key Reversal Down pattern starts in a downtrend (Figure 2), the pattern is complete when prices hit a significant lower low, and then close higher than the previous bar close.

In this video and accompanying paper, we will introduce a custom strategy “@MC Key Reversal LE SE” that will identify and test short-term reversal trading opportunities using this key reversal concept. There is also a corresponding indicator that draws arrows on the chart based on the same key reversal pattern rules.

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