“The trend is your friend until the end.” It’s one of the most often-heard phrases in trading. Spectro has 4 different types of reversal tools at your disposal to detect and confirm a change in trends. RSI Method, Scalp Exhaust Method, Volume Method, and Spectral Range. A bear or bull divergence will appear when it detects a reversal for all the tools besides the Scalp Exhaust Method. The Scalp Exhaust Method has a blue zone to indicate a reversal area.
Reversal Tools Settings
You can turn on any of the four reversal tools at any time or leave it off.
If you have spent any time trading, you have heard of the bull/bear divergence using RSI. This is when the RSI is increasing and the price is decreasing a bull divergence occurs. If the reverse is true, then a bear divergence occurs. The RSI Method tweaks the standard formula in order to get better signals.
Scalp Exhaust Method
The Scalp Exhaust Method is based on analyzing the momentum. When the trend is losing momentum in an unhealthy area(oversold/overbought) it gets highlighted as a possible strong reversal area. This basically is trying to give you a warning that a change in direction is likely to occur soon.
The Volume Method detects a bullish or bearish divergence based on one of our volume algorithms. It tells you when a shift in direction is occurring based on volume.
The Spectral Range is one of the best ones for reversals because it’s based on statistical probability based on past data, just as Spectro main core is. It calculates and highlights a divergence when a move is out of the normal spectral range during a trend. This tells you that a reversal will soon occur taking it back to the normal range.