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One-day reversal 4. One-day reversal and key reversal
Both the key reversal and the one-day reversal occur in the position where the head may form after the new high. There are similarities and differences between them. The former mainly refers to the large-scale market significance, while the latter has less market significance. In other words, the key reversal may be the beginning of the mid-line or even long-term market U-turn. One-day reversal may only be a small-scale reversal and the beginning of a strong adjustment.

But sometimes there is no clear distinction between one-day reversal and key reversal. Between them, there is the possibility of mutual transformation. In other words, an expected small-scale reversal may evolve into the beginning of a larger reversal. Thus, the one-day reversal is transformed into a key reversal.

This is definitely not an armchair strategist, not a purely theoretical game. In the market, in the short-term, mid-line and long-term markets, this conversion is often performed every day and every hour.

For example, an optimistic estimate suddenly failed, and the market suddenly developed rapidly in the opposite direction-a one-day reversal turned into a key reversal.

For another example, a breakthrough that is very similar to the position of the key reversal is suddenly extremely strong. On the K-line chart, there is such a graph: the two short-term moving averages are briefly close together, and then quickly diverge in parallel-after that, the key reversal has evolved into a small-scale one-day reversal. This figure is vividly called "Flying Dragon", "Old Crow Head", "Pigeon Eye" and "Crane Dance" in the market.

These two reversals need to be grasped flexibly and are quite difficult. For positions that may be expected to be adjusted, we must always keep in mind the concepts of two reversals and compare them repeatedly with the actual market trend.

In a strong market, especially in a bull market, these two reversals can also be easily understood as emphasis and weakness. But it must be clear that this is only for the convenience of understanding and must not be confused in operation. Because of a weak adjustment and a key reversal, the long-term direction of the market is very different.