The Brilliant Trend reversal indicator falls among the many thousands of technical analysis indicators you can use for trading forex. It’s helpful for traders looking for opportunities by confirming the end of a dominant trend. Trading a trend reversal is a strategy that often works well, especially when we buy low and sell high. However, timing the tops and bottoms of the market is not easy. That is where this indicator can come in handy, when combined with other forms of chart analysis and exceptional forex money management.
What is the Brilliant Reversal Indicator?
A brilliant reversal indicator marks two critical points in a market. First is the swing high – marking the possible end of the bullish trends. And second is the swing low position – marking the possible end of the bearish trend.
In action, the brilliant reversal indicator analyses past timeframes: the price of candles closing prices. The algorithm settings adjust every time a candle or time frame lapses, and then determines if the trend is due for a reversal.
When the algorithm spots a downtrend forming, it signals by marking a swing high with a red circle – whose location is on top of the last candle. So, this mark spots a swing-high price point, and market prices record lower prices in subsequent timeframes.
Conversely, when the brilliant reversal indicator spots a swing low – the indicator shows a green circle – the whole location is lower than the last candle. Once the prices mark the swing-low position, prices record higher closes in the following timeframes.
Pro-Note: The brilliant reversal indicator falls in the class of non-repainting indicators. Specifically, these indicators have values that do not change once every price cable closes. This means they can be used for back testing and signals will not change after the fact, which can be frustrating when you consider the majority of technical indicators are already lagging behind price.
The algorithms make calculations by referring to past candlesticks. The brilliant reversal indicator captures the following vital metrics with price candles or bars: Price highs, lows, opens, and closings.
Brilliant Reversal Strategy
Buy Signal
- Prices mark a swing low position, and the brilliant reversal indicator marks the price point with a circle.
- Allow the prices to mark a swing high to confirm an apparent trend reversal.
- It is wise to reconfirm the trend reversal from bearish to bullish with a second indicator such as a simple moving average.
- Once the trend reverses, a trader can join in the direction of the bullish trend.
- Open a position by factoring in a well-placed stop loss and a take profit position.
Sell Signal
- Prices mark a swing high position, and the brilliant reversal indicator marks the price point with a circle.
- Allow the prices to mark a swing low to confirm a clear reversal of the trend.
- Again, it is wise to reconfirm the trend reversal from bearish to bullish with a second indicator, such as the Parabolic SAR.
- Once the trend reverses, a trader can join in the direction of the bearish trend.
- Open a position by factoring in a well-placed stop loss and a take profit position.
Conclusion
Trading with the brilliant reversal indicator is relatively straightforward. However, to drastically increase the chances of it producing good signals, you will need to implement market analysis with other additional indicators and price action analysis. If you like the look of the indicator, you could always test it on a demo account to begin with so you do not take any risks. After trading the strategy with consistent and favourable results on a demo account, you could then make the seamless switch to a live account.
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