A trend reversal is when the price of an asset starts to move in the opposite direction of the prevailing trend. So, if the market has been moving up (known as an uptrend), a trend reversal would be when it starts to head back down again.
The concept of a trend reversal is essential for forex traders because it provides an opportunity to enter into a trade in the direction of a new, emerging trend. It can potentially lead to profits if timed correctly.
However, it's worth noting that not all reversals will result in a sustained change in direction, and some may only be temporary corrections within a more significant overall trend. As such, traders need to consider each potential reversal before making any decisions carefully.