Reversal
A sustained change in the direction of the prevailing trend, not just a temporary counter-move.
A reversal ends one trend and starts another. It requires structural evidence — an uptrend reversal needs price to break below a prior swing low and fail to make new highs; a downtrend reversal needs the opposite sequence.
Reversals are confirmed in hindsight. In real time, the first sign is often a divergence between price and momentum, a climactic volume spike, or an extended move into a major resistance/support zone. Trading reversals carries higher risk than trend continuation because you are fighting recent momentum.
Related Terms
Breakdown
Price moving decisively below key support, signalling that sellers have overwhelmed buyers at that level.
BeginnerDeath Cross
The 50-day moving average crossing below the 200-day moving average — a widely-watched long-term bearish signal.
IntermediateDistribution
A period where large holders are quietly selling into strength — a potential precursor to a downtrend.
AdvancedDivergence
Price making a new high/low while a momentum indicator fails to confirm — a warning that the current move may be losing steam.
IntermediateDowntrend
A market structure defined by lower highs and lower lows, reflecting sustained selling pressure.
BeginnerLower High
A rally peak that fails to reach the prior swing high — the second structural requirement of a defined downtrend.
BeginnerLower Low
A trough that undercuts the prior swing low — one half of the structural definition of a downtrend.
BeginnerMean Reversion
The tendency of price to return toward its historical average after an extreme deviation — the foundation of counter-trend trading.
IntermediateMomentum
The rate of change of price — how fast and with what force price is moving in a given direction.
BeginnerResistance
A price level where selling pressure has historically halted or reversed an upward move.
BeginnerTrend
The persistent directional bias of price over a defined timeframe — up, down, or sideways.
BeginnerUptrend
A market structure defined by a sequence of higher highs and higher lows, signalling persistent buying pressure.
Beginner