Role Reversal

Role reversal, or polarity, is the habit of a level changing sides. Resistance that breaks and is retested from above can act as support. Support that breaks and is retested from below can act as resistance. The reason traders give is that buyers who missed the break, and sellers who are trapped, both act at that price. The reason is a story. The behaviour is what you can test.

A clear level, a clear close through it, and a later return to it from the other side. Without the return, you have a break, not a reversal of role. The retest can wick through and close back on the new side.

After an upside break, a hold of the old resistance is the throwback long. Risk goes back through the level. If the retest closes back under it, the role did not reverse.

After a downside break, a failure at the old support is the pullback short. A close back above the level fails it.

Expecting every broken level to work perfectly on the retest. Many breaks never retest. Many retests slice through.

The effect is stronger when the original level was obvious and the break was decisive. A fuzzy line that was crossed ten times will not suddenly become precise support.