How to Trade a Oil Down oil trend Reversal

How to Trade Downward Oil Trend Reversal: How to Identify a Oil Downward Oil Trend Reversal Oil Trading Signal

Down Oil trend Crude Oil Reversal

When crude crude oil price breaks-out above the downward oil trend-line (resistance) the crude oil trading price will then move up

How to Trade Downward Oil Trend Reversal: How to Identify a Oil Downward Oil Trend Reversal Oil Trading Signal

Oil Down Trend Reversal Trading Strategy

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

Since the downward oil trend line is the point of resistance and this point of resistance has been broken after a oil trend-line break - we then expect crude crude oil price to move towards the opposite direction upwards and this is interpreted as a down oil trend reversal oil signal.

When this happens oil traders will close the open oil sell orders which they had sold. This is known as taking profit.

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

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

To trade this oil down trend reversal setup as a oil trader once you open a new oil trade in the direction of the oil trend reversal the crude crude oil price should immediately move upwards in that direction, in a crude oil price break-out manner. This means that the crude oil prices should immediately move upwards in that direction of the reversal oil signal without much of a resistance.

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

Another tip is to wait for the oil downward trend line to be broken & for the oil market to close above it so as to confirm this down oil trend reversal oil signal.

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

Therefore, when trading this oil down trend reversal setup it is best to wait until the crude crude oil price break-out has been confirmed by crude crude oil price closing above the oil trend line.

• Downwards Market Oil Trend Direction Reversal - this down oil trend reversal oil signal is confirmed once the crude crude oil price closes above the downwards oil trend line, this should be the correct time to open a buy oil trade, so as to avoid a oil whipsaw.