How to Trade Extreme Reversals and VWAP Reversals
In our community, we trade two types of reversals:
- VWAP reversals (or as Brian coined the them: Double Bottom Reversals)
- Extreme Reversals (or as Robert coined them: Booty Reversals)
As you may know, today I slept in and got to the trading station a bit late, around 11 am. I saw X was selling off heavily and since I had already missed the Open, I decided to look for good candidates for Booty Reversals. I traded 2 reversals on X. The first one did not work, but the second one worked quite nicely.
Have a look at my recap from today to see how I traded.
- There’s an extreme sell off for at least 60 minutes
- Once that happens, wait for indecision candlesticks on both your 15-minute and 5-minute chart
- Your entry criteria is then:
- a new 15-minute high
- a new 5-minute high
- a cross-over of 9 or 20 EMA and 50 SMA on a 1-minute chart
5. Profit target: your final target is VWAP, but partials can be done in moving averages on your 5-minute chart
Just like any other strategy, getting a solid entry in this particular strategy is more of an art than science, and it definitely comes with experience and practice.
Do you see The boot in my 15-minute chart?
Below, you can review my trade on X with arrows showing my entries and exits. As I mentioned above, getting good entries requires experience, and sometimes a few stabs. For me, my first trade was not a good entry and I got myself stopped out (I could have stayed in there, but I had too much size). I then later went long again when I saw the bounce from the moving averages.