Continuation vs Reversal Trading
Continuations trade with the established momentum (more frequent, easier). Reversals try to catch the top or bottom (rare, harder).
In any given structural leg on the 4H, there are only two reversals (the top and the bottom) but multiple continuations in between. Continuation trading means waiting for pullbacks within the established trend and entering on realignment — the direction is confirmed, POIs are clear (chains, flips, liquidity), and all you need is mid-timeframe alignment. Reversal trading means trying to catch the exact point where the trend changes — this involves more guesswork, more ego, and significantly lower probability. Many reversals occur during off-hours (spread hours, Asia session) or during high-impact news events that most traders avoid. For most traders, focusing on continuations provides more opportunities, higher probability, and less psychological stress. Reversals should only be attempted after the 4H structure has already shifted (CHoCH confirmed), with full confirmation stack.
✓How to Recognize
- •Continuations: pullback within an established trend, mid-TF realignment, trade toward 4H target
- •Reversals: only two per structural leg (top and bottom), require 4H CHoCH + full confirmation
- •Continuations are more frequent and have higher probability than reversals
- •Best continuations happen close to the reversal point (early in the new leg)
⚡How to Avoid
- →Trying to catch the exact top or bottom (ego-driven, low probability)
- →Taking reversal trades without a confirmed 4H change of character
- →Ignoring that many reversals happen during off-hours or news events
- →Taking continuations after your 4H target has already been hit (no clear target remaining)