How to spot a reversal / change in market conditions.

Here is how I recognize condition changes in the markets. These condition changes are critical because they signal to me that I should exit a trade if the conditions have changed, and potentially look for a trade in the direction of the condition change. This will be the first post of a series explaining what I do and how I do it. For those that have experience, you might say that my condition change BOT signal is the first leg of a flag. A BOT Long being a bearish flag and a BOT Short being a bullish flag. This is very true, and I will explain in detail how I attempt to recognize the difference and manage positions accordingly when I see the formation of a flag being confirmed. For now, just take it for what its worth, and try to understand the price action during a BOT signal. I actually ASSUME FLAGS INSTEAD OF REVERSALS during BOTs. This is a key rule of mine to wait for confirmation of buyers stepping in before entering the trade.

This was the first sign of seller failure. However, I wait to allow sellers to step back into the market and see if they can depress price lower. If there is seller failure, I take the long with a stop below the swing low.

If buyers can step in and support price, I become a buyer.

Here is the confirmation of the BOT Long, where I can begin to assume the reversal instead of the flag but there is still the high probability of the flag / continued pressure from sellers:

If in a long, make sure to protect yourself with a stop. The best way is to trail swings. The number one rule is the have you stop above you entry price in this situation. Never leave anything up to chance, be protected because there is still a high probability of a bearish flag if buyers are unable to continue setting higher highs and sellers step in upon buyer failure.

BOT Long tells you four things:

1) Possibly the last wave of shorts / first wave of longs
2) Stop looking for a short.
3) Exit a short if you're in one.
4) Monitor for a long.

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Update- 4:23 pm
Here is what ended up happening towards the end of the day. The BOT Long was invalidated with a BOT Short signaling. This means if profit wasn't taken on the long trade earlier, you must exit no matter what. The BOT short was valid for about 25 points on the NQ.