Reversal Cloud
Identify potential reversal zones and consolidation within the market
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Identify potential reversal zones and consolidation within the market
Last updated
Was this helpful?
Our reversal cloud allows traders to easily identify zones where the market is likely to reverse. When candles come in contact with the upper or lower boundaries of the cloud, it is a good idea to take profits, or consider entering a position contrary to the current trend. The reversal cloud may also be used to identify areas of consolidation within the market depending on how far apart the upper and lower boundaries of the cloud are.
Below is a photo displaying how price bounces up and down between these boundaries. The red arrows indicate bearish reversals while green arrows indicate bullish reversals.
The next photo shows how close the boundaries get during consolidation, which tends to result in a bullish or bearish breakout. You should never be trading when the boundaries are close, as it is always an indication of consolidation. If you are in a position and see that the boundaries are coming together closely, it would be wise to consider closing your position in order to avoid potential loss or getting trapped in consolidation.
The blue highlighted zone shows where the boundaries were close during consolidation, while the red arrow indicates where the bearish breakdown occurred.
The Reversal Cloud can be enabled or disabled within the Origami Algo settings menu. You also have the option to turn the gradient on or off.
Below you will see what the Reversal Cloud looks like when the gradient is turned off.
