V shaped reversals are based on selling climax and the fact that the last seller has sold. For catching V shaped reversal we must see the following :
1) The market has a sustained trend move, few large range bars.
2) The last leg of the move should be very sharp indicating possible capitulation or climax.
See the chart, here we locate a pivot low P bar, and go one bar back ( P-1) if the high of this P-1 bar is higher than the high of P bar, it it is not ,then we go to P-2 bar and when the high of the P-1 or P-2 bar is taken out by the market, we buy with a stoploss of pivot low.
The chart shows green line indicating buy level.
The same method can be used for profit booking if we are short....book profits on high of P-1 bar. In steep downmove, we trail the profit taking on high of each successively lower bars so profit taking can be done on high of P bar..
http://s24.postimg.org/gdluikkyd/V_shaped_reversal.png
Smart_trade