💭 How to identify real reversals on the chart and avoid false signals? 🤔
📌 One of the most common mistakes beginners make is entering on every reversal candle without confirmations, leading to repeated losses.
1. Don't just rely on the candle shape
Candles like the hammer or bullish engulfing are not enough on their own. They should appear in a logical place (strong support/resistance, or at the end of a clear trend).
2. Use price confirmation
After the reversal candle, wait for the closure of an additional candle that confirms the new trend, especially on higher time frames.
3. Combine the candle with the location and indicator
The best reversals come when:
The candle appears at a support/resistance area.
An indicator like RSI or MACD crosses.
The price breaks a trend line or price pattern.
4. Beware of false reversals
Markets love deception. Watch out for low liquidity or unexpected news that might mislead you into a false reversal.
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