Price Action Reversal Concepts — Complete Guide

Uptrend:
HH → HH → HH → HH
HL → HL → HL → HL

Then price breaks below the last HL:
HH → HH → FAIL (lower high forms)
HL → HL → HL BROKEN = CHOCH ✓

This is the FIRST signal the uptrend may be ending.
Entry: Short after CHOCH confirmation
Stop: Above the last HH
Target: Previous swing low or demand zone

Downtrend:
LL → LL → LL → LL
LH → LH → LH → LH

Then price breaks above the last LH:
LL → LL → FAIL (higher low forms)
LH → LH → LH BROKEN = CHOCH ✓

Entry: Long after CHOCH confirmation
Stop: Below the last LL
Target: Previous swing high or supply zone

Confluence checklist:
□ Price at major S/R level (D1/W1)
□ Trend showing exhaustion signs
□ Liquidity sweep occurred (stop hunt)
□ Reversal candlestick pattern formed
□ Structure shift (CHOCH) on lower timeframe
□ Multiple timeframe alignment

Score: 4+ out of 6 = HIGH probability reversal

1. Price sweeps a key high/low (takes liquidity)
2. Immediately reverses with strong candle
3. Lower timeframe shows CHOCH
4. Enter on pullback to the CHOCH level
5. Stop: Beyond the liquidity sweep
6. Target: Opposite liquidity pool

This is the HIGHEST probability reversal entry.

1. Price tests the same level 2-3 times
2. Each test shows weaker momentum
3. RSI divergence visible (optional confirmation)
4. Structure break on the downside/upside
5. Enter on the break or retest
6. Stop: Above/below the tested level

1. Price approaches major weekly/daily level
2. Strong rejection candle forms (pin bar, engulfing)
3. Next candle confirms direction
4. Enter on break of rejection candle
5. Stop: Beyond the wick
6. Target: Next key level in reversal direction