News Trading - After release📉 News Spike Reversal – GBPUSD & USTEC, 15min
This example highlights how the ELFIEDT RSI + 3SD Reversion Strategy can be used to catch sharp pullbacks after a news-driven price spike, using statistically overextended conditions and volume-confirmed exhaustion.
🔻 What Happened Here:
📍 1. Sudden Spike on News Release
Both GBPUSD and USTEC experienced a sharp rally — likely due to a high-impact economic release or scheduled news event. This kind of impulsive movement often creates price extensions beyond normal volatility ranges.
📍 2. “DOWN” Signal Triggered on Both Assets
As price surged higher, the indicator detected that:
Price exceeded the upper statistical band (3SD above the moving average)
RSI entered extreme territory
Volume activity was significantly elevated
This triggered a “DOWN” label on both charts, flagging the area as a potential short-term top.
📍 3. High-Probability Reversal Back Toward the News Origin Zone
After the initial spike, both instruments retraced sharply, pulling back into the prior consolidation range — a classic “retest of the news move” often seen when markets overreact and correct shortly after.
✅ How You Could Have Traded It:
Watch for news-driven price surges — the strategy is built to detect extreme moves.
When the “DOWN” label appears on both instruments around the same time, it adds confluence — this increases conviction in the reversal potential.
Look for candle confirmation (e.g., bearish engulfing or long upper wick) to time the entry.
Target the origin of the news spike or the prior resistance zone as your first take-profit level.
🔁 Bonus: Multi-Asset Confluence
When two different markets react similarly to news and print simultaneous reversal signals, this serves as a strong confidence boost — especially when both RSI readings also begin to reverse from extremes.
This dual example shows how the ELFIEDT strategy can help traders avoid emotional trades during news volatility and instead catch logical pullbacks after the dust settles.
