Key Reversal Strategy

The key reversal does not occur very often but is very reliable when it does.

After an up-trend

• The Open must be above yesterday's Close,
• The day must make a new High, and
• The Close must be below yesterday's Low.

After a down-trend

• The Open must be below yesterday's Close,
• The day must make a new Low, and
• The Close must be above yesterday's High.

Remember

The signals are most reliable if they occur after a strong trend. If the trend is weak, so is the signal.