$BTC

Stock Price Behavior Analysis Course

Session Nine: Three Major Signs of Trend Reversal

After mastering trend structure, the next step is to learn how to identify whether a trend is about to reverse. Market reversals usually do not happen without warning; they leave signs behind.

⸻

1. Structure Break

When an upward trend fails to make new highs and the low falls below the previous Higher Low, it indicates that the original bullish structure has been broken. Conversely, in a downward trend, if it fails to make new lows and the high breaks above the previous Lower High, the bearish structure is broken.

👉 Structure break is the most direct reversal signal.

⸻

2. False Breakout

• Price breaks above the previous high (or below the previous low) but quickly retracts.

• This indicates that the market was unable to sustain momentum, instead luring in buyers (or sellers).

• Commonly occurs at the end of a trend, serving as a typical reversal sign.

⸻

3. Volume Divergence

• Price makes new highs, but volume does not increase proportionately.

• This indicates a decline in market participation and weakening momentum, often seen at the end of a trend.

• When paired with price structure analysis, it can improve the accuracy of reversal predictions.

⸻

These three major signs are important tools in price behavior analysis, helping you to "not guess the top but to retreat when signs are evident."