Supply & Demand Reversal

Catch turns at zones where buyers or sellers stepped in before, with the stretch shown by the Reversal Bands.

When to use it#

• Price has run a long way into a known zone.
• Price is also inside or touching the outer Reversal Band.
• You accept that reversals usually carry fewer stars, because the trend checks often fail.

Settings#

Anything not listed stays on its default. See the Full Settings Reference for every option.

Step by step#

1. 1
   Wait for price to reach a zone and the outer band together

   One alone is a weaker reason. Both together tell you the move is stretched at a level that mattered before.
2. 2
   Wait for a Shift in the new direction

   A Shift marks the first break of structure against the old trend.
3. 3
   Take the first signal that follows

   Read the Why. Expect the higher timeframe checks to fail. That's the trade-off of trading against the trend.
4. 4
   Use smaller size

   Counter-trend trades deserve less risk than trend trades. Many traders halve their Risk %.

Managing the trade#

• Take more off at TP1 than you would on a trend trade.
• Reversals often stall at the Trend Ribbon or the 50 EMA. Plan for it.

When to skip it#

• There's no Shift, only a touch of the zone.
• Both higher timeframes are strongly trending against you.

Common mistakes#

• Fading every band touch in a strong trend.
• Using full size on a counter-trend idea.

Related playbooks#