Forex & Stocks HH-LL Trend Reversal System

HH-LL Trend Reversal Trading Strategy – A simple 5-step method to identify when a trend is reversing.  By mastering both the trend following trading technique and trend reversal trading, we’ll naturally be able to trade profitably in various market situations.

Spotting trend reversals isn’t a challenge. Frequently, they’re as clear as daylight and darkness

So, what’s the issue?

Why do numerous traders find themselves in a state of confusion?

Well, here’s the answer: traders tend to over-complicate things. That’s the root cause. They make it way more complex than it needs to be. So, it’s time to simplify things and clear up the confusion.

Let’s make understanding trend reversals easier and go back to the basics. Less focus on things that don’t really matter – and more focus on making money.

In this tutorial, I’ll share a simple 5-step method to spot when a trend changes, when to take action, and how to make the most of it.

So, let’s begin.

Don’t let yourself be overwhelmed or confused by the minutiae. The first step is to declutter your chart by removing all your indicators. This will give you a clean, unobstructed view of the data.

Zooming out is a crucial part of this process. By taking a step back, you can get a broader perspective of the market movements. This will help you see the bigger picture and identify overarching trends that might not be apparent when you’re zoomed in on the day-to-day fluctuations.

If there’s a strong trend, you’ll see it right away. It’ll stand out on the screen. Look closely at the chart: Is there a trend, and which way is it going?

It’s quite straightforward, isn’t it?

If you don’t see a clear trend in a chart, it’s best to look at other instruments. There are many markets to trade, so keep looking until you find a clear and easy-to-see trend. Don’t force yourself to find a trend in something that doesn’t show a clear one.

In this case, be patient and keep searching for the right tool. Remember, finding a clear trend in the right tool can help you make better trading decisions.

So, after you clearly know the market trend, the next step is choosing which trend reversal indicator to use.

It’s time to take a closer look at your chart. You need to add some context to that empty chart. This means adding some indicators or looking for some patterns.

You can find market trend reversals by using one of the following indicators or patterns. You won’t go too wrong using one of these:

• 1st. Moving Average:
  • This indicator calculates the average closing price over a certain period of time. If the current price is above the moving average, the trend tends to go up. Conversely, if the current price is below the moving average, the trend tends to go down.
• 2nd. Relative Strength Index, or RSI:
  • This indicator measures the relative strength of an asset by comparing the price increases to the price decreases over a specific period. If the RSI is above 70/80, the asset is considered overbought and the trend tends to go down. Conversely, if the RSI is below 30/20, the asset is considered oversold and the trend tends to go up.
• 3rd. Bollinger Bands:
  • This indicator shows market volatility by displaying upper and lower boundaries of the expected price range. If the current price is above the upper band, the asset is considered overbought and the trend tends to go down. Conversely, if the current price is below the lower band, the asset is considered oversold and the trend tends to go up.

Now that we’ve identified a trend and have an indicator or pattern suggesting a potential trend reversal, we’re onto the third stage of the five-stage process.

So, it’s time to get serious.

What exactly is a trend reversal event?

It’s a specific situation or conditions that, when they occur, indicate that a trend has reversed.

This isn’t something you make up as you go. You need to define it beforehand. If you wait until the market is active and money’s at stake, your judgment might be affected.

• Higher High – Lower Low Indicator

Determining the points of ‘higher high and lower high’ or ‘lower high and lower low’ is one of the most important tasks for all traders, whether institutional or retail. At first glance, it might seem like a simple job. However, it becomes quite complex when conducting analyses across multiple markets and time frames.

Hence, the Higher High Lower Low Indicator stands out as the best tool every trader should possess. I rely on this indicator, and you surely need it too.

But don’t worry because you can download this indicator and trading system in the description area.

I’ve included a template with the system that you can easily add to your chart, automatically plotting all these indicators accurately. This way, there’s no need for any additional hassle. Find the download link in the description. I hope this helps you improve your trading skills.

• Download “TraderVersity-(HHLL)ReversalSystem” (Zip/RAR File).
• Copy mq4 and ex4 files to your Metatrader Directory …/experts/indicators/
• Copy the “TraderVersity-(HHLL)ReversalSystem.tpl” file (template) to your Metatrader Directory …/templates /
• Start or restart your Metatrader Client.
• Select Chart and Timeframe where you want to test your forex system.
• Right-click on your trading chart and hover on “Template”.
• Move right to select “TraderVersity-(HHLL)ReversalSystem” trading  system and strategy
• You will see “TraderVersity-(HHLL)ReversalSystem” is available on your Chart

If you can spot a series of higher highs and higher lows in the market, congratulations – you’ve spotted a trend. When that pattern ends, the trend usually ends with it. We’ll look more at how the patterns ends in a moment.

Let’s review what we’ve done so far:

• 1st. We found a trend.
• 2nd. We decided which indicator or chart pattern to use to tell us when the trend might end.
• 3rd. Our specific Trend Reversal Event has occurred.

Now it’s time to act.

On this chart, we can see that the bullish trend moves above the moving average line.

• FIRST:
  Look out for a break in the pattern of Higher Highs and Higher Lows.

Market trends usually come in waves, called higher highs and higher lows for uptrends. In a downtrend, they’re known as lower lows and lower highs.

For simplicity, let’s focus on the upward trend with higher highs and higher lows. Just flip it for the downward trend.

If you see a sequence of higher highs and higher lows in the market, well done – you’ve found a trend. Usually, when that pattern stops, the trend ends too.

• SECOND:
  Look for when the price breaks above or below a Moving Average

A common strategy with moving averages is to watch for crossovers. Lots of automated traders use this to track how strong a trend is.  The good thing about this method is that you’re following the same signal as the big traders, so it can give you more confidence.

That is practically everything you need to know.

It’s not complicated.

But here’s how you can mess it all up.

Step 5 is staying consistent.

Not following your rules is the biggest mistake.

If you face a few losses, don’t start adjusting. Avoid adding more indicators that confuse or changing their settings. Combine basic trend analysis with good risk-reward trades – and you’ve got a powerful tool for trading.

That’s all it need.

Now you have learnt practically everything you need to know about identifying when a trend is reversing in the market.

•  You can identify a trend. Think like a 4 year old and let it jump off the screen.
• You have an indicator or chart pattern that alerts you to the possibility that trend might be coming to an end.
• You have a specific set of criteria that tells you when the trend has finished.
• And you know to take action, trust your analysis and either open or close your trade.

DOWNLOAD TRADING SYSTEM