Forex Technical Analysis: Potential Reversal vs. Actual Reversal
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Potential Reversal vs. Actual Reversal
There is a difference! Potential reversal only tells us that there are indications that a trend change has a higher likelihood of happening than it did before. Actual reversal tells us that there are indications that the trend has already changed and so our directional focus should change with it.
So, what are the differences?
There are numerous indicators to inform us of potential reversal. We can use momentum indicators, volume indicators, charting patterns or candlestick formations, actually too many to discuss in this post, so I want to focus in on the chart pattern that is forming on the weekly AUDUSD.
The AUD has been in an uptrend for, well, a few years. The current leg began in May of 2010. That being knows there is an obvious tendency to focus on the upside and