Reversal Days

Last modified 14:40, 5 Nov 2012

Reversal Days

reversaldays.gifA reversal occurs when the close price indicates a change in trend even though the high and low are consistent with the trend.

Essentially this Hi-Lite is a Higher/Lower Tops/Bottoms analysis qualified by a "close" filter.

For a Short Reversal in a long market the current day will satisfy the following three conditions:

  • Higher High than the previous day, AND
  • Higher Low than the previous day, BUT
  • The Close for the current day is lower that its Open.

A Long Reversal day will meet the following conditions:

  • Lower High than the previous day, AND
  • Lower Low than the previous day, BUT
  • The Close for the current day is higher that its Open.

In both cases the first two conditions are consistent with Higher Tops and Bottoms for a long market, and a Lower Tops and Bottoms for a short market.

The third condition in both indicates that during the current day the trend may have reversed. A Close lower than the open may indicate a short reversal for a long trend, and a close higher than its open may indicate a long reversal for a short trend. This is what the Reversal Days Hi-Lite detects.

Display Settings

The indicator bullets can be selected to be displayed. The default is not to display them.

Check the Display Bullet check box to show the bullet.

The bullets can be either a Dot or Dash. The bullet will be the same color as the Hi-Lite.

Also, the position of the indicator can be set to display at either the Open, High, Low or Close level for the interval. The default is Close which is understandable considering that the Close price determines whether not the day is a reversal day instead of a Higher Top and Bottom or Lower Top and Bottom day.

One other display option is to un-check the Change Bar Color selection. The bar will resume the chart's normal color scheme and only the bullet's Dot or Dash will be displayed in the Hi-Lite's chosen color.

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