A reversal occurs any time the trending direction of a stock or other asset changes. Being able to spot reversal signals is of vital importance to the trader, as they can re-evaluate their current positions, exit while conditions are still favorable, and enter new positions based on the new trend direction. A reversal strategy is a specific trading strategy that aims to profit from reversal trends within the market.
We don't know everything about the markets. We're just devoted to learners. Taken from those smarter than ourselves, here's how we define Reversal.