Vertex Reversal System

The Vertex Reversal System combines multiple indicators and points to a price reversal. This guide will talk about how the indicator works and how you can apply it as a strategy.

What is the Vertex Reversal System?

The Vertex Reversal draws single lines along with the Bollinger Bands to identify a trend reversal. Unlike the traditional BB indicator, the Vertex doesn’t plot the bands on the chart; rather, it plots them in the window below. In addition, the Vertex applies two Bollinger bands; upper and lower.

The Vertex points out the overbought/oversold levels for a trend reversal. You can locate these levels easily, as the indicator highlights them.

Vertex Reversal System
Vertex Reversal System

Vertex Reversal System Strategy

To trade with the Vertex Reversal, you must look for the overbought and oversold levels. These overbought/oversold levels are highlighted as simple and extreme.

The simple overbought level has a value of 6, while the extreme overbought level has a value of 10. The uptrend trend is about to reverse when the price reaches these levels.

Conversely, the simple oversold level has a value of -6, while -10 is for the extreme oversold. Whenever the indicator is close to these levels, it signifies a bullish reversal.

Whenever the indicator hits the overbought/oversold levels, it creates an arrow. The red arrow means to go short, while the green illustrates long positions. The arrow acts as a confirmation signal that the trend is about to reverse.

The Vertex uses a lot of confluences, so you can use them individually. If you want more confirmation, you can use other indicators like the RSI or MACD.

Vertex Reversal System works best on longer timeframes. If you want to use it for short-term strategies, you can look for the overall trend on a longer timeframe and then enter the trade on a short timeframe.

Buy Signal

  • The Vertex Reversal must plot a green arrow.
  • Wait for the price to continue going up and then enter the trade.
  • Place a stop-loss at the arrow.
  • Set take-profit at the recent high or exit the trade when the red arrow appears.
Vertex reversal system buy signal
Vertex reversal system buy signal

Sell Signal

  • The Vertex Reversal must plot a red arrow.
  • Wait for the price to continue going down and then enter the trade.
  • Place a stop-loss at the arrow.
  • Set take-profit at the recent low or exit the trade when the green arrow appears.
Vertex reversal system sell signal
Vertex reversal system sell signal

Fibonacci Killer Pros & Cons

The Vertex Reversal has its share of strengths and weaknesses. Let’s take a look at them.

Pros

  • The Vertex uses multiple indicators for confluences.
  • The indicator gives fewer false signals on longer timeframes.

Cons

  • The indicator may seem confusing at first.
  • The indicator may not work properly on shorter timeframes.

Conclusion

The Vertex Reversal System mentions the trend’s reversal by using multiple indicators. The indicator uses Bollinger Bands to navigate the overbought and oversold levels. When the indicators hit these levels, it plots an arrow to mention trend reversal. You can always practice trading on a forex demo account to begin with to improve your trading skills and build up your confidence.