Price Action is one of the most effective trading strategies in the Forex market. Its uniqueness and profitability are confirmed by all traders who have chosen it and this is not casual because this strategy analyzes the price and patterns that it has formulated itself. This analysis allows not only to assess the behavior of market participants but also to determine the reaction that can be expected.
Let the Price Action strategy be associated with you, first of all, with the fact that it is the most effective way to predict the following:
- Where and in what direction the price will move;
- At what point it will be best to open a position in a trending market.
The most interesting thing is that such opportunities are available without using any technical indicator.
What is Hook Reversal?
This is a price action strategy formation that is difficult to grasp. By catching it, the trader can make good trading decisions, which is why everyone in the market is diligently looking for Hook Reversal. So be careful and try not to miss out on Hook Reversal. Maybe you are the next lucky one.
Hook Reversal is a reversal on the inside bar. Traders are looking for a way to find a pivot point, i.e., trend reversal signal by applying indicators, reading news, etc. Some even trade on the cyclic phases.
At the same time, finding a turning point is not difficult at all. It is enough to look closely at the market movement – among the various candlestick combinations. Some accurately suggest the weakness of the current trend.
One such combination is Hook Reversal. It does not occur as often as other Price Action formations. However, the strongest trend can be grasped with Hook Reversal. Hook Reversal’s advantage is that there is an opportunity to place a small stop-loss, which means that the trader will enter a trend reversal with minimal risk.
So, write down all the signs of an elusive but very profitable Price Action – Hook Reversal strategy formation. It occurs at the very end of a very powerful Forex trend, and its signal bar never goes beyond the previous bar.
There are several Hook Reversal signs that you can spot to help you get the most out of your trade.
If the trend is going up, then the bar:
- It opens close to the high;
- It closes at about low;
- Must have max lower and min higher than the previous bar.
If the trend is going down, then the bar:
- Opens next to low;
- Closes next to the high;
- There should be a higher min and lower max compared to the previous bar.
Is Hook Reversal that hard to catch?
We think not. You need to be very careful and know all the criteria for the formation of Hook Reversal. But do not forget about other patterns of the Price Action strategy, because if you think and be in constant expectation of Hook Reversal, you can miss something else, no less important and profitable.
New to Forex trading? Don’t miss these beginner guides from FXCC.