Reversal

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    ReversalWhat is a trendWhat is a market trend in trading? A market trend is the ... More reversalWhat is a trend reversal? A trend reversal is when the m... More?

    A trend reversal is when the market direction changes completely and moves in the opposite way to the current trend.

    Remember: A trend reversal is different from a correction.

    For example, when an uptrend turns into a downtrend, or a downtrendWhat is a downtrend in trading? When the price of an asset... More turns into an uptrendWhat are uptrends in trading? When the price of an asset... More, a reversal has occurred.

    Trend reversals can occur at any time and can be difficult to predict. They can be caused by a change in fundamentals that might lead to a long-term price movement in the opposite direction.

    In the chart below, the price is in an uptrend (1) and then reverses to the downside (2).

    Uptrend break

    Further reading

    Visit our lesson on market sentimentThe market sentiment is the overall feeling or mood of the m... More to help you identify reversals and the direction of the markets:

    Visit our beginner strategy to take what you have learned and put it into action: