Reversal Strategies

Below are various snapshots annotating reversals and how they can be spotted and confirmed using the Footprint® chart. The most common reversal pattern is the Bar Delta reversal pattern which highlights price reversals using volume and how it is entering the market at key turning points. This pattern occurs when price is trading at new highs/lows and volume and order flow are showing more strength in the opposite direction of the price probe.

For instance, a bar that trades a new high should be confirmed by a positive bar delta which is more aggressive buying. This helps confirm the strength of the price probe. If price were to probe new highs but have a negative bar delta, then this would be a bar delta divergence pattern and signal a possible reversal.