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''Strong [[RV]]. Strong and sharp reversal where market reversed in a V bottom or almost a V bottom (for e.g. a very strong reversal from a [[MDB]] or [[MDT]]). For example, on [[20230510]], market reversed sharply from bar 51 and 52 after the MDB 48-50. SRV usually happens at some [[MSR]], on [[20230510]], market reversed sharply from the H of [[20230504]] after it closed the gap created by [[20230505]] big bull bar.'' | ''Strong [[RV]]. Strong and sharp reversal where market reversed in a V bottom or almost a V bottom (for e.g. a very strong reversal from a [[MDB]] or [[MDT]]). For example, on [[20230510]], market reversed sharply from bar 51 and 52 after the MDB 48-50. SRV usually happens at some [[MSR]], on [[20230510]], market reversed sharply from the H of [[20230504]] after it closed the gap created by [[20230505]] big bull bar.'' | ||
Strong reversals have essentially the same characteristics of any strong move, like a strong breakout or a strong trend. Here are a number of characteristics that are common in '''strong bull reversals'''<ref>[[Book:CHAPTER 2 Signs of Strength in a Reversal]]</ref>: | |||
* There is a strong bull reversal bar with a large bull trend body and small tails or no tails. | |||
* '''The next two or three bars also have bull bodies that are at least the average size of the recent bull and bear bodies.''' | |||
* The spike grows to five to 10 bars without pulling back for more than a bar or so, and it reverses many bars, swing highs, and bear flags of the prior bear trend. | |||
* '''One or more bars in the spike have a low that is at or just one tick below the close of the prior bar.''' | |||
* One or more bars in the spike have an open that is above the close of the prior bar. | |||
* One or more bars in the spike have a close on the high of the bar or just one tick below its high. | |||
* The overall context makes a reversal likely, like a higher low or lower low test of the bear low after a strong break above the bear trend line. | |||
* The first or second bar of the breakout has a close that is above the highs of many prior bars. | |||
* The first pullback occurs only after three or more bars. | |||
* The first pullback lasts only one or two bars, and it follows a bar that is not a strong bear reversal bar. | |||
* The first pullback does not hit a breakeven stop (the entry price). | |||
* '''The spike goes very far and breaks several resistance levels like the moving average, prior swing highs, and trend lines, and each by many ticks.''' | |||
* As the first bar of the reversal is forming, it spends most of its time near its high and the pullbacks are less than a quarter of the height of the growing bar. | |||
* There is a sense of urgency. You feel like you have to buy but you want a pullback, yet it never comes. | |||
* The signal is the second attempt to reverse within the past few bars (a second signal). | |||
* The reversal began as a reversal from an overshoot of a trend channel line from the old trend. | |||
* It is reversing a significant swing high or low (e.g., it breaks below a strong prior swing low and reverses up). | |||
* The high 1 and high 2 pullbacks have strong bull reversal bars for signal bars. | |||
* It has trending “anything”: closes, highs, lows, or bodies. | |||
* The pullbacks are small and sideways. | |||
* There were prior breaks of earlier bear trend lines (this isn’t the first sign of bullish strength). | |||
* The pullback to test the bear low lacks momentum, as evidenced by its having many overlapping bars with many being bull trend bars. | |||
* The pullback that tests the bear low fails at the moving average or the old bear trend line. | |||
* The breakout reverses many recent closes and highs. For example, when there is a bear channel and a large bull bar forms, this breakout bar has a high and close that are above the highs and closes of five or even 20 or more bars. A large number of bars reversed by the close of the bull bar is a stronger sign than a similar number of bars reversed by only its high. |