Momentum divergences on MACD or RSI and a noticeable increase in the outer Bollinger Bands signifies a quintessential high time frame reversal signal.
Proficient reversal traders understand that 90% of reversal trading involves waiting on the sidelines for the right moment to go in and the balance 10% is knowing that entering before the top and bottom are settled, is foolhardy.
A higher time frame level lays the foundation for a reversal trade!
The economic concept of demand and supply level and support and resistance are used to recognize the high impression price levels.
Do keep in mind that, trading at those levels on the basis of pending orders is not considered as reversal trading. It is in fact only about predicting trends.
Reversals happen at the mid-levels, but they are low prospect trading and should be avoided.
Once the price comes down to the level of your choice, you need to patiently apply the trading rules that exposes you to only high possibility setups and filter out the rest of price volatility.
Momentum Divergences of RSI or MACD indicate the reversal signal and the finished Fibonacci sequences enhances the trading convergence.
Even then, you need to wait.
Typically, the high time frames reversal signal happen at the top and the bottom of the market. Inexperienced traders mistake this as their entry point. They go in without any advantage.
To gain the upper hand, we should move in only when the reversal is already in our favor.