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Trading Technique Reversal Ala Sushi Roll: Maximizing Profits from Price Reversals

Utilizing price reversals can be a profitable strategy in the trading world, and one interesting technique to apply is the sushi roll reversal trading technique relying on the RIOR (Rolling Inside Outside Reversal) formation. What is it, and how can it be applied? Let's explore further.

Essentially, the reversal or trend reversal is often viewed differently by traders. Some choose to follow the trend, while others prefer to go against it. The sushi roll reversal trading technique becomes an attractive option for those seeking reliable reversal patterns.


Interesting Facts about the Sushi Roll Reversal Trading Technique:

This technique is known as sushi roll not because it has a pattern or indicator resembling the food. According to Mark Fisher, the creator of this technique, the name "sushi roll" was given because the concept was developed during lunchtime by a group of traders. Test results on stock index markets, particularly on NASDAQ movements between 1990 and 2004, showed that this technique could generate impressive returns.

8 Basics of the Sushi Roll Technique:

  1. Using Approximately 10 Candlesticks: Utilizing about 10 candlesticks as a reference, where the first 5 candles move in the direction of the trend and the next 5 candles move in the opposite direction.
  2. Rolling Inside: Phase where the first 5 candlesticks are trapped in a narrow trading range.
  3. Outside Reversal: Phase where the next 5 candlesticks move in the opposite direction with High and Low that fully encompass the previous 5 candles.
  4. Combination of Rolling Inside and Outside Reversal: Referred to as the RIOR setup.
  5. Confirmation with Breakout: Signal confirmation can be done by observing the breakout from the trendline.
  6. Long-Term and Weekly Chart: This method is recommended for weekly charts and considered a long-term method.
  7. Can Be Adapted to Lower Time Frames: If desired for medium or short term, this technique can be tested on lower time frames.
  8. Engulfing Pattern with More Candlesticks: The RIOR setup reflects the engulfing pattern but with more candlesticks.

How to Use the Sushi Roll Technique in Forex Trading:

1. Sell Scenario (Price in Bullish Condition):

In an uptrend situation, the emergence of the RIOR setup can be a bearish reversal signal. Note the Rolling Inside and Outside Reversal phases and confirm with breakout from the trendline. Open sell can be done after the breakout candle closure, with Stop Loss placed in the high area of the candlestick forming the Outside Reversal.

2. Buy Scenario (Price in Bearish Condition):

When the market shows a downtrend condition, the RIOR setup can indicate a bullish reversal signal. Note the Rolling Inside and Outside Reversal phases and confirm with breakout from the trendline. Open buy can be done after the breakout candle closure, with Stop Loss placed in the low area of the Outside Reversal.

The sushi roll reversal trading technique with the RIOR formation is a strategy that can provide potential profits. Although it requires longer confirmation, backtest results show significant return potential. It's important to test and refine this technique according to individual preferences and trading styles. Always remember to apply wise risk management to protect your capital in every transaction.

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