6. Reversal Framework

6.1 Basic Reversal Conditions

Community insight

• Any time you're fading the higher-timeframe trend, there should be an SSMT present. — Garrett — "Filter Price through ‘Candle Profiles’", 46:16
• You want to trade the manipulation because it's what forms the expansion — but it needs SMT alongside it, so you actually know it's a real reversal. — Garrett — "4H Profiling", 43:20
• What truly verifies a reversal is displacement. — Garrett — "Asset Synchronisation", 46:40

A high-quality reversal usually requires:

1. Key level hit
2. SMT
3. Swing point
4. SS / PSP / SSMT
5. Displacement / gap
6. Candle profile support
7. Time window or driver support

Basic formula:

Reversal = Key Level + SMT + Swing Point + SS / PSP + Displacement

Afyz summary:

Fundamental truth of reversal = CiC + displacement / gap

Underlying logic:

• The market requires a swing formation to reverse.
• Swing formation requires a key level.
• Cracks in correlation validate that swing formation.
• Reversal signatures after correlation cracks confirm expansion timing.
• CiC confirms a bias. It does not create the bias by itself.

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6.2 Reversal Entry

Community insight

• Position as low or high as you reasonably can within the reversal candle's lower/upper half — without overreaching, since you don't know exactly how far the reversal will run. At minimum, your stop should sit there. — Garrett — "4H Profiling", 44:20

When a key level is hit:

If there is a reversal signature

Meaning SMT + SS via PSP / SSMT:

• Trade the reversal.
• For HTF 4H+ SMT + PSP, no additional LTF SMT is required.
• Entry can be placed at the discount EQ of the reversal candle.
• SL goes beyond SMT invalidation.
• Early entry makes it easier to move SL to BE.
• Give each reversal a maximum of two chances.

If there is no reversal signature

• Do not trade the reversal directly.
• Wait for a continuation setup:
  • universal sequence;
  • 15m+ gap retest;
  • 30m+ confirmation, especially for late continuation.

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6.3 Two Chances to Reverse

Community insight

• A reversal gets two chances: expanding away from the swing point of the key level, or the C2 swing point being manipulated first. If both fail, it's invalidated. — Garrett — "GxT Invalidations | Continuations", 04:44

At a key level, a reversal has two chances:

1. Expand away from the swing point;
2. the C2 swing point is manipulated and then price reverses.

If both fail, the reversal is invalidated.

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6.4 Reversal Invalidation

The only high-probability way to trade invalidation:

• find the most recent internal relevant level close to the reversal within the overall DoL;
• this level is the most likely invalidation point;
• wait for price to fail to reverse;
• then look for continuation / invalidation entry.

If the reversal trade fails, wait for the continuation trade.

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6.5 Failure Swing Trading

Community insight

• For a failure-swing setup, SMT isn't a required filter — the swing, SS, and gap away are what matter. — Garrett — "How I Confirm Narrative with Drivers", 07:13

To trade a failure swing:

• SS is required;
• gap away is required;
• do not trade only because a failure swing appears;
• the failure swing must be validated by strength switch and displacement;
• in range consolidation, SMT will usually validate a failure swing;
• if the clean CiSD is too far away, a failure-swing CiSD may be used.

Simplified rule:

Failure Swing Trade = Failure Swing + SS + Gap Away

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6.6 Two Forms of Reversal Signature

Community insight

• A reversal signature can show up two ways: an immediate expansion-into-then-away-from-the-level confirmed by a CISD, or a slower version where candle 1 manipulates, candle 2 consolidates, and candle 3 is where the expansion actually shows. — Garrett — "How I Confirm Narrative With Drivers", 7:52

• One form is immediate: engage the key level, form the swing, and see expansion into the level followed by expansion away, confirmed by a CISD.
• The other form consolidates first: candle 1 manipulates the level, candle 2 consolidates or closes, and candle 3 is where the expansion actually shows.
• Either form still needs the underlying swing point, key level, and CiC to support the trade.

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6.7 Refining Entry via Lower-Timeframe Fractal

Community insight

• Covering a wide reversal-candle wick and waiting for a tighter, nested lower-timeframe fractal of the same reversal both reach the same draw — but the nested fractal gives a meaningfully better risk-to-reward. — Afyz — "True Reversal Logic" trade breakdown, 4:53

• The same reversal can be traded two ways: cover the reversal candle’s own wick with a wide stop, or wait for the next candle’s open and trade a smaller, nested fractal of the same reversal for a tighter stop.
• Both reach the same draw, but risking the nested fractal’s high / low instead of the full reversal candle’s wick meaningfully improves risk-to-reward.
• Confirm the nested fractal the same way as the higher-timeframe reversal: SMT at its own high / low, followed by its own change in state of delivery.

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