I have recently tried using reversal bars intraday (in the a.m. ) and have found them to be of very little value in detecting trend reversal. Is there a particular time frame (i.e.-15 min) that they seem to work better than other periods??? Thanks. Also, if you find them as good as "coin flipping" let me know that too.
By definition a singe bar does not define a trend. A reverse bar can signal a scalp trade yes. But your question has too many variables, as differnt issues show differnt tendancies, has it gapped open? is the rv. bar at a new local high or low?...sure a 1 hour rev. bar is more sinifigant that a 5 min......just a thought or two.....Jack
Larrybf, Are you asking if there are certain reversal bars that occur on intraday tf's that can potentialy signal a trend reversal on the daily's???? PEACE and good trading, Commisso
Larrybf, I did some testing several years ago on Tradestation and found that for the S&P futures the classic reversal bars were no better than a cointoss. I have to say that despite that, I pay attention to them, particularly when a key reversal occurs when a move is extended. I would use them to signal an exit, never an entry.
that's a very good point AA.....you can have a rev. bar in an uptrend with a higher high and a higer low. This is something that pure chart reading (as opposed to too many indicators) will jump out at you. Any rev. bar is a good reason to tighten stops or at the very least get your attention. An intraday 5, 15 min.) Rev. bar that just punched thru a daily high or low then reverses (stop gunning) can be a counter trend or scalp trade also. If you are trying to catch the top or bottom, then at some point you HAVE to have a rev. bar....BUT picking tops and bottoms with the intention of a trend revesal trade is better set up or defined by more than one bar. True sharp V bottoms are pretty rare. ......Jack