Reversal Algo combined with ATR Trend/Top/Bottom

This reversal and trend strategy will help traders to learn about the concept of looking for confluence and to confirm signals with other indicators to increase the edge.

Strategy Idea

This strategy is about identifying both trend shifts and trend continuations setups. It all depends on where the signals occur. It can be hard to identify these kinds of setups especially if Buy/Sell indicators are used in the wrong way. That is why we came up with this simple strategy that filters out some signals for you.

Before using any Buy/Sell signal indicator we recommend you have a basic understanding of Support/Resistance.

 

Reversal confluence

If you don’t understand these rules, you should look for another strategy!

Rule number #1

  • Do only look for setups during relatively high volatility. There is no point in trying to catch a signal during a low volatile market. Better to wait for volume and volatility to come into play! The signals become way more accurate during these market states.

Rule number #2

  • Make sure that you don’t take any Short trades right at a support level and don’t take any Long trades right at a resistance level. Doomed to lose in the long run.

Price moves

The market flow up and down where some price moves are significant while others are minor corrections/price pauses.

The price moves happen within the current market structure. The market structure can either be derived from the timeframe applied on the chart or from a higher timeframe. The higher the timeframe the more reliable is the market structure. That is why we only should take trades based on a higher timeframe structure. (We recommend using the 1-hour chart, or above)

 

To be able to trade successfully you need to understand that most of the signals should not be traded. A good trader is patient and analyzes the market hours before entering a trade. Get a feel of the current market structure and take entries/exits based upon that, using indicators to confirm their analysis/trade idea.

 

 

While new traders jump in and out on every signal and end up blowing their accounts. So please take our advice here, be patient, analyze the market in higher timeframes, and do only use indicators to confirm that analysis.

Price moves

The market flow up and down where some price moves are significant while others are minor corrections/price pauses.

The price moves happen within the current market structure. The market structure can either be derived from the timeframe applied on the chart or from a higher timeframe. The higher the timeframe the more reliable is the market structure. That is why we only should take trades based on a higher timeframe structure. (We recommend using the 1-hour chart, or above)

 

To be able to trade successfully you need to understand that most of the signals should not be traded. A good trader is patient and analyzes the market hours before entering a trade. Get a feel of the current market structure and take entries/exits based upon that, using indicators to confirm their analysis/trade idea.

 

 

While new traders jump in and out on every signal and end up blowing their accounts. So please take our advice here, be patient, analyze the market in higher timeframes, and do only use indicators to confirm that analysis.

The only problem!

Yes, there is a big “problem” for traders that have limited knowledge about support/resistance and general about how to read the market.

We’re telling the truth here. 

 

If you blindly follow any of these signals that pop on your chart you will most likely lose. You have to take your trades based on the current market structure. Or do you wanna get trapped in a short trade within a strong bullish trend?

So if we blindly rely on what an indicator says, you probably gonna lose in the long run. You need to get the full picture and analyzing the higher timeframes to understand in which phase the market is in.

Support Level

The Strategy

With the help of this strategy, you will be able to identify better setups and eliminate noise.

Reversal Algo Settings

Leave all the parameter settings to default!

 

  • Enable the “Show Reversal Trend Line”

 

  • Enable the “Show Trend Trailing Buy/Sell”

 

  • Enable “Range/TP signals”
Structure signals

ATR Trend & ATR Top/Bottom

You only have to change the Trend Sensitivity from 2 to 1. Leave all the other settings to default. 

Momentum Breakout Trend Setup

ATR Trend & ATR Top/Bottom

You only have to change the Trend Sensitivity from 2 to 1. Leave all the other settings to default. 

 

    Long Entry

    Long

    Long Entry:

    1) Buy or B signal occur in Reversal Algo!
    2) ATR Trend/Top/Bottom displays a Yellow Candle

    Bullish and Bearish Bullish Structure trades

    Short Entry

    Short

    Enter Short: when Reversal Algo gives a Sell Signal and ATR + PSAR is Red.

    Momentum breakout trades

    Short

    Short Entry:
    1) Sell or S signal occur in Reversal Algo!
    2) ATR Trend/Top/Bottom displays a Purple Candle

     

    Take Profit – Exit – Stop Loss

    • Take Profit Long – Bank (some) profit when a Range/TP signal occur.
    • Take Profit Short – Bank (some) profit when a Range/TP signal occur.

     

     Exit Long Position – When Reversal Trend Line turns Red.
     Exit Short Position – When Reversal Trend Line turns Green.

     

    • Long Stop-loss – When Reversal Trend Line turns Red.
    • Short Stop-loss –When Reversal Trend Line turns Green.

    The holy grail

    Enhance your trading result!

    No matter which indicator/strategy you’re using, remember: It’s all about confirming and finding confluence around key levels/zones.