Beware of Standard Reversal Day Definitions

The standard definition of a reversal
high day is a day that witnesses a new high in an upmove and then reverses to
close below the preceding day’s close. Analogously, a reversal low day is a day
that witnesses a new low in a decline and then reverses to close above the
preceding day’s close.

…Frequently…an uptrend will
witness a number of reversal highs that prove to be false signals and then fail
to register a reversal high near the actual top. It can be said that reversal
high days successfully call 100 out of every 10 highs. In other words, reversal
days provide occasionally excellent signals, but far more frequent false
signals.

…I suggest defining a reversal high
day as a day that witnesses a new high in an upmove and then reverses to close
below the preceding day’s low. (If desired, the condition can be made even
stronger by requiring that the close be below the low of the prior two days.)