Identifying a top? How do you sense market weakness?

[stephens]

I am trying to work on reversal plays. How do you identify a possible reversal in play?

[Fxtrader06]

You can use a combination of indicators or look for divergences.

[Lisa]

The 10:00 am reversal is a common pattern.

[Soultrader]

I base my trading on pivots. If price is unable to remain above a pivot level, I will look for a reversal trade. For example, let's say my key resistance on a stock XYZ is $50.85. If prices trade to $50.80 and can not break above the $50.85 mark, I will look for a short setup. If there is a RSI divergence at a pivot level, that becomes further confirmation.

The 10:00 am reversal is also something I pay attention to as well. It doesnt happen 100% of the time, but is a fairly common pattern.

I focus on key pivot cluster levels as key support and resistance. I will look for prices to reverse around these levels by reading tape.

[stephens]

How about using trendlines and moving averages?

[Soultrader]

	Quote:	stephens
	How about using trendlines and moving averages?

That could work too. Take a look at this thread.

It shows you a simple strategy using moving averages.

[Jesse]

The ADX is a good indicator to determine whether a trend is strong or about to end.

[Dr Who]

	Quote:	stephens
	How about using trendlines and moving averages?

Try using TD lines!

They are used in Forex and can be used in other trading. They are OBJECTIVE trend lines with qualifiers to validate their signals - filtered trend lines. A trader can determine if a breakout is worth fading and if buying has been exhausted etc.

[stephens]

	Quote:	Dr Who
	Try using TD lines! They are used in Forex and can be used in other trading. They are OBJECTIVE trend lines with qualifiers to validate their signals - filtered trend lines. A trader can determine if a breakout is worth fading and if buying has been exhausted etc.

Sorry for the newbie question but are TD lines trendlines? Thanks

[Terry_I]

Hey James...hope this as good as place as any to ask.....when you are identifying clusters...are they simply monthly, weekly, daily, updated accordingly, or do you keep dailies for a week, weeklies for a month...monthlies for a year to get "mega" clusters over time? Thanks..