How to Trade a Commodities Trend Reversal

Commodities Trend Line Break

After commodities price has moved in a certain direction for an extended period of time within a commodity trend it reaches a point where it stops moving within the commodities trend. When this happens we say that the commodity trend line has been broken and this is interpreted as a commodity trend reversal commodity signal.

Since the commodity trend line is the point of support or resistance and this point of support or resistance has been broken after a commodity trend line break - then we expect the commodities price to move towards the opposite direction and this is interpreted as a commodity trend reversal commodity signal.

When this happens commodity traders will close the open commodity orders which they had bought or sold. This is called taking profit.

Up commodities trading trend Commodities Reversal

When commodities price breaks below the upward commodity trend line (support) the commodity market will then move downwards

Commodities Upward Commodities Trend Line Break - How to Identify a Commodities Trend Reversal Commodity Trading Signal

This commodity trend reversal trading signal is considered to be complete with the formation of a lower high of the commodities price. This also provides a trading opportunity to sell once the commodity trend line is broken - commodity reversal signal.

Down commodities trading trend Commodities Reversal

When commodities price breaks above the downward line (resistance) the commodities price will then move up

Commodities Downward Commodities Trend Line Break -How to Identify a Commodities Trend Reversal Commodity Trading Signal

This commodity trend reversal commodity signal is considered to be complete with the formation of a higher low. This commodity reversal trading setup also provides a trading opportunity to open a buy commodity trade once the commodity trend line is broken - commodity trend line reversal commodity signal.

NB: Sometimes when commodities price breaks its commodity trend it might first of all consolidate before moving in the opposite direction. Either way it is always good to take profit when the commodity market commodity trend reverses.

To trade this commodity reversal setup as a commodity trader once you open a new commodity trade in the direction of the commodity trend reversal the commodities price should immediately move in that direction, in a commodity price breakout manner. This means that the commodity prices should immediately move in that direction without much of a resistance.

If on the other hand the commodity prices do not immediately move in the direction of the commodities price breakout then it is best to close out the commodity trade because it means that the commodity trend is still holding.

Another tip is to wait for the commodity trend line to be broken and for the commodity market to close above or below it so as to confirm this commodity trend reversal commodity signal.

What happens is that most commodity traders open trades waiting for a commodity reversal even before the commodity trend is broken, only for the commodities price to touch this commodity trend line and for the current market commodity trend direction to hold and the commodity instrument to continue with the current market trend.

Therefore, when trading this commodity reversal setup it is best to wait until the commodities price breakout has been confirmed by commodities price closing above or below the commodity trend line, depending on the direction of the commodities market.

• Upward Market Commodities Trend Direction Reversal - this reversal commodity signal is confirmed once the commodities price closes below this upward commodity trend line, this should be the correct time to open a sell commodity trade, so as to avoid a commodity whipsaw.

• Downward Market Commodities Trend Direction Reversal - this reversal commodity signal is confirmed once the commodities price closes above the downward commodity trend line, this should be the correct time to open a buy commodity trade, so as to avoid a commodity whipsaw.