The key reversal does not occur very often but is very reliable when it does.
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After an up-trend:
- The Open must be above yesterday's Close,
- The day must make a new High, and
- The Close must be below yesterday's Low.
After a down-trend:
- The Open must be below yesterday's Close,
- The day must make a new Low, and
- The Close must be above yesterday's High.
The signals are most reliable if they occur after a strong trend. If the trend is weak, so is the signal.