Using Reversal IQ As An Indicator Instead Of A Strategy
While Reversal IQ is a full-fledged trading system with entries and exits - it can still be used as an indicator.
The hallmark feature of Reversal IQ is its incredible entry signals. While exits are dynamically calculated as well to produce strong performances, Reversal IQ simply has a knack for "sniping" entries!
Take a look at this recent losing BTCUSDT.P trade!
Reversal IQ signaled a long entry at $58,793.
On the same candle as the long entry, price moved 0.23% against the position at worst and at least 0.73% in favor of the position! Those using Reversal IQ as an indicator could have certainly made use of this!
The image above further exemplifies the entry signals of Reversal IQ.
The long first trade, which was exited for a loss had, at least, a 0.67% profitable price move. The largest downside Sprice move before the profitable price move was only 0.01%!
The image above shows a similar example with a short position. Price moved at least 0.58% in favor of the short position. The worst price move against the position before that 0.58% move was only 0.04%!
So, while Reversal IQ will always trade the best parameters possible, discretionary traders can certainly take note of the exceptional entry signals provided by Reversal IQ, in additional to making use of the IQ Channel and IQMA.
When performing live analysis, you can use the IQ Channel to evaluate price reversal areas, whether price has extended too far in one direction, and whether price is likely to reverse soon.
The deeper price moves into the bullish reversal area (blue) the better chance that price has extended too far and will reverse to the upside soon. The deeper price moves into the bearish reversal area (red) the better chance that price has extended too far and will reverse to the downside soon.
Of course, in times of exuberance or panic, price may push through the reversal levels. While rare, it can happen to any indicator.
The image above shows the IQMA in action. Traders can use the IQMA to characterize the predominant trend. For instance, when IQMA is blue, traders might only elect to take long positions and, when IQMA is red, traders might only elect to take short positions.
Summary
With these visualizations, traders can actively use Reversal IQ as a trading indicator to assist their trading analysis.