In this thread :
http://www.traderslaboratory.com/for...html#post18174
brownsfan019 was asking about the 2 bar reversal. It's an old school strategy that my coach taught me about. Potent? Sure is.
By its name you can tell it's a reversal strategy. Alone, it's a fine reversal indicator, but coupled with VOLUME it's a fabulous one.
When you have a bar that is DOWN and then it is followed by a bar that is UP and closes inside the upper 2/3 of the range of the previous bar, you've got a 2 bar reversal on your hands. What you want to be sure of is that this reversal is happening at the bottom of a down trend (be it a micro trend or macro trend) and then if volume increases on the UP bar you've got yourself a fabulous signal.
Here are a couple of pictures from a few days back on a 5min YM chart. This sort of thing can be seen on many charts on many time frames.
All it is showing us is that there is more attraction to the higher prices than there was to the lower prices, there for the path of least resistance is....drumroll please....UP!