A basic strategy to use with Reversals is to combine a trend indicator to filter signals, and use stop orders for price confirmation. Use it with a Dynamic Trend of period 200 as a filter, and use different sensitivities in the same chart, for entries and exits. For entries you should use a sensitivity between 6 and 8, and for exits you should have the sensitivity 8 and 9 loaded in the chart.
The template below load the indicators in the following manner:
Blue Arrows: Arrows to go long, or close short positions
Red Arrows: Arrows to go short, or close long positions
Orange Arrows: Arrows to close positions only
- Dynamic trend is red
- There is a red arrow
- Set a sell stop-order below the low of the reversal bar. The expiration shouldn’t be more than 3 bars.
The inverse is valid for long trades.
In case 15+ bars have passed without an opposite Reversal or any significant movement, the trade should also be closed. Other exit criteria should be implemented by the trader such as a stop-loss/take-profit.