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Exhaustion Reversal

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# 📘 Exhaustion Reversal – Quick Start Guide

This tool highlights **reversal zones** where price is stretched too far and likely to snap back.

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## 1. What to Look For

* **Green Box + Neon BUY Arrow** → Possible Buy Setup
* **Red Box + Neon SELL Arrow** → Possible Sell Setup
* Background color:

* Light **green tint** = Bias is LONG (favor buy setups)
* Light **red tint** = Bias is SHORT (favor sell setups)

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## 2. How to Take a Trade

**BUY Setup**

1. Wait until you see a **green shaded box** and a **neon BUY arrow**.
2. Confirm the candle closed **green** (bullish).
3. **Entry (EP):** Enter at the closing price of the signal candle (labeled “BUY ENTRY”).
4. **Stop Loss (SL):** Set just under the low of the signal candle (labeled “SL”).
5. **Take Profit (TP):**

* Safer target → the blue **Center Line**.
* Aggressive target → **Band 1**.

**SELL Setup**

1. Wait until you see a **red shaded box** and a **neon SELL arrow**.
2. Confirm the candle closed **red** (bearish).
3. **Entry (EP):** Enter at the closing price of the signal candle (labeled “SELL ENTRY”).
4. **Stop Loss (SL):** Set just above the high of the signal candle (labeled “SL”).
5. **Take Profit (TP):**

* Safer target → the blue **Center Line**.
* Aggressive target → **Band 1**.

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## 3. Quick Rules to Remember

* ✅ Trade WITH the background bias.

* Green background → focus on BUY setups.
* Red background → focus on SELL setups.
* ❌ Skip weak candles. Look for **strong bodies** (bigger candles).
* ❌ Don’t take every arrow. Wait until price stretched to the **outer Band 2**.
* ✅ Manage risk. Never risk more than **1–2% of your account** on a single trade.

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## 4. Beginner Flow (step-by-step)

1. Watch for **background tint** (green = buy, red = sell).
2. Wait for price to **touch/pierce Band 2**.
3. Watch for a **reversal candle** (green after red, or red after green).
4. Enter at the “ENTRY” label, place SL and TP at the lines.
5. Let the trade play out – don’t move stops unless you scale out.

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## 5. Example Trade

* NAS100 on 5m chart:

* Background turns red → bias is SHORT.
* Price spikes above **Upper Band 2**.
* Red reversal candle closes.
* Arrow + label appear → Enter SELL.
* SL at candle high, TP at Center Line.

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💡 **Pro Tip for New Traders:**
Start by practicing this system in a demo account. Focus on spotting the *cleanest* setups where price clearly stretches to Band 2 and gives a strong reversal candle.

Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.