Outside Bar & 2-Bar Reversal Alerts + System

The Outside Bar & 2-Bar Reversal Alerts + System indicator identifies high-probability price action reversal patterns and provides an automated trade management framework directly on the chart.

Usage

The Outside Bar & 2-Bar Reversal Alerts + System tracks two specific structural patterns: the Outside Bar and the 2-Bar Reversal. Users can utilize these signals to identify potential trend exhaustions and market turns.

When a signal is detected, the indicator automatically plots an entry line, a stop loss, and a take profit level based on a user-defined R-multiple.

• Bullish Reversals: Triggered when price sweeps a low and reclaims the prior range, suggesting buyer absorption.
• Bearish Reversals: Triggered when price sweeps a high and rejects downward, suggesting seller absorption.

The integrated trade management system terminates lines automatically once a target or stop is reached, keeping the chart clean while preserving historical trade data for review.

Details

The logic behind the script is based on the concept of "full absorption." Unlike standard engulfing candles, the Outside Bar logic here requires strict conditions:

• Outside Bar: Requires the signal candle to exceed the prior candle's range on both sides while closing beyond the prior open.
• 2-Bar Reversal: Focuses on "close-to-close" extremity, where a committed push in one direction is immediately reclaimed by the following candle.

The system also incorporates institutional filters:

• VWAP Filter: Ensures signals align with the intraday volume-weighted average price to avoid trading against the session's dominant trend.
• Swing Sweep: Only triggers signals if the price has recently "swept" a liquidity point (a recent pivot high or low), which often provides the necessary momentum for a reversal.

Settings

Patterns

• Show Bullish/Bearish Signals: Toggles the visibility of signals for each direction.
• Show Outside Bars: Enables the detection of Outside Bar patterns.
• Show 2-Bar Reversals: Enables the detection of 2-Bar Reversal patterns.

Swing Filters

• Use Swing Filter: Restricts signals to those that sweep a recent pivot.
• Swing Lookback: Defines how many bars to look back for a valid pivot.
• Swing Strength: Sets the number of bars required on each side of a high/low to qualify as a pivot.

Trade Levels

• Take Profit (R Multiple): Sets the reward-to-risk ratio for the automated TP level.
• Show Trade Lines: Toggles the entry, SL, and TP visual overlays.

Time Filter

• Use Entry Time Window: Restricts signal generation to specific hours (e.g., New York Open).
• Start/End Hour & Minute: Customizable parameters for the active trading window.

FAQ

How do I access Outside Bar & 2-Bar Reversal Alerts + System?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

What markets does this work on?

Since the indicator is based on pure price action, it is effective across equities, futures, forex, and crypto markets.

Can I adjust the risk management?

Yes, the indicator allows you to modify the R-multiple for take profits and the stop loss logic is based on the signal candle's structural open.