Don't be fooled by "false reversal Candlesticks" and end up with nothing! The truly reliable reversal can be found in this one core principle.

Have you ever fallen into this trap? You see a perfectly standard "reversal candlestick" and rush in to buy at the bottom or sell at the top, only to find that the next candlestick completely reverses and the market grinds you into the ground?

In fact, candlestick patterns are all "smoke screens"; the position of the closing price is the true key to reversal! Many beginners focus solely on what the candlestick looks like, completely ignoring whether the key position is stable, ultimately becoming the "bag holders" of the market.

To judge whether a reversal is reliable, the key point is: the closing price must stand in the correct direction of the pattern!

Two types of true reversal signals, use them directly when you see them.

1. The closing price penetrates the body of the previous Candlestick (this indicates that the battle between bulls and bears has truly distinguished a winner, and the buying and selling forces have completed a genuine reversal);
2. The closing price breaks through the previous high/falls below the previous low (structurally confirming a reversal, trend momentum is very clear, and the reversal logic is directly closed-looped).

The most deceptive "false reversal" trap, be sure not to fall into it.

Some candlesticks look like reversals (for example, the "spike candlestick" with long lower shadows and long upper shadows), but the closing price is still hovering at a low level, even lower than the lowest point of the previous candlestick.

What reversal is this? It’s purely a "breather during a downtrend"! The market is intentionally using fake patterns to trick retail investors into bottom-fishing. Once you enter the market, it will continue to crash. Blindly rushing in will only get you trapped tightly, and it will be painful even to cut losses.

Trading is fundamentally a game of probabilities. Judging reversals should never be based on "blind guesses"; only the cold, hard rules matter: if the position is right, a single Candlestick is enough; if the position is wrong, no matter how perfect the pattern is, it still leads to a trap.

If you find it complicated, just remember this sentence: a true reversal will definitely follow a candlestick with multiple volume tests; there is no need to gamble on a single candlestick. Patiently waiting for confirmation signals is the secret to profitable trading!