🎁 How to distinguish between correction and reversal?🤔
💡The difference that makes winning trades!
Most beginners exit trades at the wrong time, either out of fear of a natural correction, or entering late after missing a reversal opportunity.
📌Here are the differences simply:
1. Correction:
A temporary movement against the overall trend, often occurring within a price channel or known support/resistance area.
Example: Strong rise, then slight drop (correction) followed by a continuation of the rise.
2. Reversal:
A complete change in direction — from bullish to bearish or vice versa. Often accompanied by a break of strong support/resistance areas + a change in price structure.
3. Indicators that help you:
RSI: from overbought to the opposite direction
MACD: a clear crossover with a change in momentum
Volume: a sudden increase with the break indicates a reversal, not just a correction.
4. Time is important:
Corrections are often quick. Reversals are slower at the beginning then explode later.
💡Understand the difference, and enter with confidence.
#MarketCorrection #CryptoEducation #BinanceTips #tradingmindset
💭Next lesson title:
How to build a strong trading plan and stick to it? (The practical guide🎯)
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