Neural Reversal Probability Indicator

The Neural Reversal Probability Indicator tool provides a calculated probability of market reversals using a pre-trained neural network model. It is specifically optimized for use on 1-minute charts to identify short-term exhaustion and potential turning points in price action.

Usage

The indicator displays a value typically ranging between 35 and 75, representing the neural network's confidence in a reversal occurring. When the indicator value reaches or exceeds the user-defined Threshold, a signal is generated (displayed as a green bar by default).

• Stocks: The default threshold of 71.0 is generally effective for most equities.
• Forex and Other Assets: Users should manually optimize the threshold based on the specific asset's volatility. If you require more frequent signals, lower the threshold; for more selective, higher-probability signals, increase it.
• Timeframe: This script is designed exclusively for the 1-minute timeframe.

Details

This indicator implements a neural network that was trained externally on historical BTCUSD 1-minute data (from February 2020 to February 2022). The resulting weights and architecture were then converted into Pine Script. The model utilizes lagged price normalization and "EPrice" features to approximate complex market functions that are often difficult to capture with standard linear indicators.

Because financial markets contain inherent randomness, the model rarely reaches extreme values like 0 or 100. Instead, it operates within a range reflecting the statistical probability of a trend change.

Settings

• Smoothing: Determines the period for the SMA smoothing applied to the final indicator output. The default is 1 (no smoothing).
• Threshold: Sets the level at which reversal signals are triggered. Higher values result in fewer, more conservative signals, while lower values increase signal frequency.

FAQ

How can I access the Neural Reversal Probability Indicator? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

Why doesn't the probability reach 0 or 100? Due to market randomness and noise, the neural network maintains a margin of uncertainty, typically resulting in a functional range between 35 and 75.

Can I use this on daily or hourly timeframes? No, this specific model was trained and weighted for 1-minute data characteristics. Using it on higher timeframes may lead to inaccurate results.