Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. You could sustain a loss of some or all of your initial investment and should not invest money that you cannot afford to lose. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Reversal definition

A reversal is a turnaround in the price movement of an asset: when an upward trend (or a rally) becomes a downward one (a correction), or vice versa. They can also often be referred to as trend reversals.

The opposite of a reversal is a continuation, or when an asset’s price trend holds. Often this means moving past key areas of support or resistance.

Technical traders use a variety of patterns and techniques in order to identify when a reversal may be on the cards. These include watching for completed patterns such as double/triple tops and bottoms, or a head and shoulders.

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