Outside Reversal SetUp
Aug 9, 2015
The Outside Reversal SetUp indicator identifies specific price action patterns based on Frank Ochoa's "Secrets of a Pivot Boss," designed to highlight potential trend reversals after a failed breakout.
Usage
The Outside Reversal SetUp can be used to identify points where market participants have unsuccessfully tested liquidity beyond previous highs or lows.
- Long Setup (BUY): Occurs when a candle's low is lower than the previous bar's low, but the close finishes above the previous bar's high. This suggests that sellers failed to maintain control, leading to a sharp bullish reversal.
- Short Setup (SELL): Occurs when a candle's high is higher than the previous bar's high, but the close finishes below the previous bar's low. This indicates that buyers were unable to sustain a breakout, resulting in a bearish reversal.
Traders often use these signals in conjunction with Pivot Points or other support and resistance levels to confirm high-probability reversal zones.
Details
The power behind this pattern lies in the psychology of "trapped" traders. When price extends past a range (resistance or support) and fails to find new business, responsive participants quickly drive price back toward the previous value area. This indicator automates the detection of these specific price action conditions:
- Bullish condition:
low < low[1]andclose > high[1]andopen < close[1] - Bearish condition:
high > high[1]andclose < low[1]andopen > open[1]
Settings
- ReversalLong: Toggles the visibility of the "BUY" arrow shape and color properties for bullish reversals.
- ReversalShort: Toggles the visibility of the "SELL" arrow shape and color properties for bearish reversals.
FAQ
How do I use the Outside Reversal SetUp?
You can look for these signals at key technical levels like Pivot Points or historical Support/Resistance to confirm a potential change in trend direction.
What do the background colors signify?
A green background highlight indicates a completed Bullish Outside Reversal, while a red background highlight indicates a completed Bearish Outside Reversal.
How can I access this indicator?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
Trading & investing are risky and many will lose money in connection with trading and investing activities. All content on this site is not intended to, and should not be, construed as financial advice. Decisions to buy, sell, hold or trade in securities, commodities and other investments involve risk and are best made based on the advice of qualified financial professionals. Past performance does not guarantee future results.
Hypothetical or Simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, including, but not limited to, lack of liquidity. Simulated trading programs in general are designed with the benefit of hindsight, and are based on historical information. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.
Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.
As a provider of technical analysis tools and strategies, we do not have access to the personal trading accounts or brokerage statements of our customers. As a result, we have no reason to believe our customers perform better or worse than traders as a whole based on any content, tool, or platform feature we provide.
Charts used on this site are by TradingView in which the majority of our technical indicators are built on. TradingView® is a registered trademark of TradingView, Inc. www.TradingView.com TradingView® has no affiliation with the owner, developer, or provider of the Services described herein.
Market data is provided by CBOE, CME Group, BarChart, Massive, CoinAPI. Select U.S. equities data is provided through Massive. CBOE BZX real-time U.S. equities data is licensed from CBOE and provided through BarChart. Real-time futures data is licensed from CME Group and provided through BarChart. Select cryptocurrency data, including major coins, is provided through CoinAPI. All data is provided “as is” and should be verified independently for trading purposes.
This does not represent our full Disclaimer. Please read our full disclaimer.
© 2026 LuxAlgo Global, LLC.