The Turn-Key Reversal is different from a Double Key Reversal in that it is a key reversal reversing a key reversal that has reversed a previous key reversal (up-down- up or down-up- down). Assume an uptrend and an initial downward reversal for the current discussion.
Crucial TurnsThe Turn-Key Reversal carries much more weight if the fourth day also closes below (above) the third day's low (high) and/or the second day's close.
The pattern begins with a high above the previous day’s high and a subsequent close below the preceding day’s close (creating a standard key reversal). The ensuing day trades below the second day’s low but reverses higher, ultimately settling above the second day’s close (an alternating key reversal) but not above the highest close.
The fourth (trigger) day exceeds the previous day’s high - and often the second day’s high - and closes below the previous day’s settlement price, creating a third successive (and alternating) key reversal. The difference between a Double Key Reversal and a Turn-Key Reversal is that a Double Key Reversal involves both reversals occurring in the same direction whereas a Turn- Key Reversal includes reversals in opposing directions.
This pattern carries much more weight if the trigger (fourth) day also closes below the third day’s low (also generating an outside-day reversal) and/or the second day’s close (two closes prior to the current day, creating a reinforcing 2 Close Reversal).
[Additional details & diagrams can be found in Eric Hadik's Tech Tip Reference Library]