The ZoneTraderPro Strong Trend Reversal pattern occurs after a Trend Trade has failed and the market changes its' direction. Fortunately most of the market reversals occur from an Exhaustion Trade or a Typical Reversal, because when a Strong Trend Reversal happens, you may have just had a losing Trend Trade.
In the below example we have a losing trend long trade. However, the ZoneTraderPro TICK filter kept you out of that trade. The previous TICK low was a -378. Before the market price traded at the Trend intermediate support zone, a TICK low of -601 had already been made. The sellers were in control and the TICK filter kept you out of a bad trade.
The market then trades to the blue trend support zone. This is not an opportunity for a long trade, it is only an area that the smart money may take profit at, and they do. The market then trades to minor resistance and the "SR" arrow is indicated. The short trend resumes for a 2.5 point profit.
What is important to know about this trade is that because of the strong trend trade comes from minor resistance, that will setup an exhaustion trade. Statistically less than 15% will make it any further than the blue counter trend support level, why is why the exhaustion trade works so well. Additionally the exhaustion trade commonly marks a market top or bottom, as it did in this example. That gives you two trades that made 6.5 points, and had no adverse excursion. Additionally the ZoneTraderPro TICK filter strategy kept you out of a losing trade.
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