Island Reversal (Bottom)
Definition
A gap down, a stranded consolidation, then a gap up — sellers left behind.
Psychology
A jump down, a pause, a jump up — the sellers below are now stuck.
Real-life analogy
💡 Sellers row out to an island in a storm — and the tide strands them there.
Expected direction
up
Entry / Stop / Target
Entry: On the upside gap or its first successful retest. · Stop: Below the island's low. · Target: Island height projected up, or to the origin of the first gap.
Historical behaviour
Powerful after capitulation declines.
Illustrative success rate
~65-70% follow-through · Medium reliability
Common beginner mistakes
- • Fading the second gap
Quick quiz — did you understand?
1. Is the Island Reversal (Bottom) generally considered bullish, bearish, or neutral?
2. After a confirmed Island Reversal (Bottom), the expected direction is usually:
3. Which is a common beginner mistake with the Island Reversal (Bottom)?
Educational and probability-based analysis only. This is not financial advice and not a prediction of real market outcomes.