Structure break
The prevailing trend must show a clear break of the most recent swing structure — a lower low in an uptrend or a higher high in a downtrend on your working timeframe. Wicks alone do not count; the body must close beyond the level.
Reference guide
The five confirmation rules for trend reversals
This page summarises the checklist taught in our workshops. Each rule must pass before we consider a reversal trade valid — skipping one is how most false entries happen.
Retest behaviour
Price should retest the broken structure and fail to reclaim it cleanly. A shallow retest with rejection wicks suggests genuine shift; a deep retest that holds above the break invalidates the setup.
Volume signature
Look for climactic volume on the final push in the old trend direction, followed by declining volume on the retest. Equal or rising volume on the retest often means the reversal is premature.
Momentum divergence
RSI or MACD should show divergence against price at the reversal zone — price makes a new extreme but momentum does not confirm. We teach this as supporting evidence, never as a standalone signal.
Entry candle
Wait for a decisive candle in the new direction at or after the retest — an engulfing body, a strong close beyond the retest high/low, or a gap rejection. Enter on the close or a limit at the retest, not mid-candle.
How to use this guide
Print the checklist and keep it beside your screen during the London session. Mark each rule pass or fail on your chart before considering size. Workshop participants receive annotated examples for each rule; this page is an overview, not a substitute for live chart work.
If you want guided practice applying these rules to your own setups, book a reversal workshop or a one-to-one chart review.