4. Reversal Day Trading Strategies

What We Look for in Reversals

Criteria for a reversal stock candidate

  1. I look for stocks hitting new highs or new lows
  2. I look for at least 5-10 consecutive 5min candles of the same color
  3. I look for RSI below 10 or above 90 to indicate extreme conditions
  4. I think of these stocks as a rubber band, the more stretched out it is, the better the snap back potential
  5. I look to buy the first candle that begins to reverse with a stop either at the high/low or minus 20 cents
  6. I use trailing stops to keep myself in these winning trades as long as possible

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