__CONFIG_colors_palette__{"active_palette":0,"config":{"colors":{"3e1f8":{"name":"Main Accent","parent":-1}},"gradients":[]},"palettes":[{"name":"Default Palette","value":{"colors":{"3e1f8":{"val":"rgb(19, 114, 211)"}},"gradients":[]},"original":{"colors":{"3e1f8":{"val":"rgb(19, 114, 211)","hsl":{"h":210,"s":0.83,"l":0.45}}},"gradients":[]}}]}__CONFIG_colors_palette__
 Join The Trade Community

Candlestick Strategies: Key Reversal Patterns

Covered in this video:


Two types of key reversals

There are both bullish and bearish key reversal patterns. A Bullish key reversal is formed when the current period lows trade below the prior period's lows only to reverse and close positive and at, or very close, to the highs of the period. A Bearish key reversal is formed when the current period highs trade above the prior period's highs only to reverse and close at, or near, the lows of the period.


The key reversal is a high probability trade signal. Sometimes.

It is very important to note that this is only the case when it occurs at historical support and resistance levels. We cannot overstate this enough. It is ultra important to know where your support and resistance levels are when you are trading with a key reversal. This increases your probability with profits, and if you are wrong, you know exactly where to put your stop-loss.  


Don't jump in with two feet

This example shows how to effectively use the bullish key reversal, and also demonstrates how to wait for the correct market signal. The first key reversal occurs on the left, but doesn't close out near the previous week's highs. So wait for a pullback, which we see at the second green arrow, putting in a higher low.  Drawing a resistance line, following the down trend, allows us to set a breakout point. Once the trade is moving above that line, we are game-on for the upside.


Reversal Candlesticks can sometimes indicate bottoms being formed

One final example from reversal candlesticks is sometimes they can indicate a bottom being formed, rather than only implying a move in the opposite direction. Here you see two bottoms being formed by the tails of the reversal candlesticks, which then prompts us to look for a directional breakout at resistance (the top line) levels).

Join the community free for 14 days:

We're For Traders With Day Jobs.

Less than a cup of coffee per day

The Contrarian Trader community is perfect for traders with day jobs. Get SMS trade alerts, stock requests, and pre-market analysis.

Here’s What You’ll Get in your FREE trial.

This paragraph here is for explaining how exactly your online course works. Tell them what exactly will happen after the sign up. Do they get access to all of it straight away? How much time will it take them to complete the course? What will happen at the end of it?

Real Time Trade Alerts

Trade alerts are sent to members using email, SMS text and push notification real time. Positions are posted on our trade alert platform. You will be advised of price targets, stop loss points and trade rationale. This dynamic platform is updated each evening so that you up to date with Bob’s strategy.

One To one Engagement

Engage with fellow members in our Traders Forum and network. This is a group of both novice and professional trader providing support and trade ideas to one another.

Live webinars are held to discuss strategy and to engage members using screen share technology to review members chart requests live. We will  also use this forum to hold live training sessions or during times of high volatility to discuss market conditions.

Daily In Depth Video Analysis

Each weeknight, Bob produces and narrates video analysis of the day’s market action, stock trades. He discusses stocks that were added as watch stocks which then leads in to his strategy for the following day.

Each Weekend Bob produces The Week Ahead Commentary strategy session. His video analysis of the charts will layout his game plan for the coming week. First he discusses the health of the stock market. Then he discusses position strategy as well as watch stocks.

Member's Stock Chart Request

A higher level of service for Gold Members who submit their symbols for Bob to review on video. Bob will review for the best risk to reward entry and exit points. This included service would cost hundreds of dollar to hire a technical analyst to perform. Bob believes in providing member value in return for their loyalty and engagement.

What people say about The Contrarian Trader

We've helped thousands of traders manage risk and increase profits.



Netted 10k in 30 days

Thanks so much for your perspective. I've probably netted about $10k in the 30 days since I've started using your service--which is awesome for me. Just wanted to pass along my thanks.

Henry D.


I made the right choice. Worth every penny.

Hey Bob,
I have to say I am impressed with the way you strategize. Within the past year I have stopped impulse buying and selling intraday. The saving on commissions alone offsets much of my membership fee. Your insight and analysis are truly outstanding. I made the right choice by upgrading to Gold Level as your bearish analysis on (CMG) saved me countless amounts of dollars. Worth every penny.



Really nice money.

Appreciate your great help in sending the alerts on NUGT. I made really nice money on Gold.

We're For Traders With Day Jobs.

Less than a cup of coffee per day

The Contrarian Trader community is perfect for traders with day jobs. Get SMS trade alerts, stock requests, and pre-market analysis.

About The Contrarian Trader,  Robert Desmond

My name is Robert Desmond and I am the founder and C.E.O. of The Contrarian Trader Inc.

I have a passion for trading stocks and equity options and an even bigger passion for educating fellow traders on how Wall Street works so that they can avoid those pitfalls that most traders including myself have endured during their learning process.

Terms and Conditions   |   Disclaimer   |   Privacy policy   |