Swing Failure Signals

The Swing Failure Signals tool identifies swing failure patterns (SFPs) by monitoring price interactions with recent swing highs and lows, confirming these movements through a structural Change in State of Delivery (CISD). It is designed to pinpoint liquidity runs where price triggers stops beyond a key level before reversing, providing visual markers and alerts for high-probability reversal points.

Usage

The script can be utilized across various asset classes and timeframes to detect reversals. On lower timeframes, it focuses on intraday liquidity sweeps, while higher timeframes highlight broader structural failures.

• Bullish Swing Failure: Occurs when price trades below a prior swing low (a sweep) and then closes back above a defined delivery level, confirming a bullish CISD.
• Bearish Swing Failure: Occurs when price trades above a prior swing high and then closes back below a defined delivery level, confirming a bearish CISD.
• Visual Elements:
  • Dashed Lines: Represent the swept swing level that initiated the setup.
  • Solid Lines: Indicate the CISD level used for confirmation.
  • Bar Coloring: Changes to reflect the active SFP state.
  • Labels: A "$" symbol marks the liquidity sweep, while arrows indicate the confirmed signal.

Details

The script utilizes pivot-based logic to store and track significant historical highs and lows. A "sweep" is detected when the current price exceeds these levels within a specific lookback window. To filter out false breakouts, the script requires a Change in State of Delivery (CISD), which is a shift in candle structure showing expansion in the opposite direction. A tolerance filter is applied to measure the strength of the reaction relative to the sweep, ensuring that only impulsive reversals are validated as signals.

Settings

Calculations

• Pivot Detection Length: Sets the lookback window used to identify swing highs and lows.
• Max Pivot Point Edge: Determines the maximum historical distance allowed for a pivot to be considered for a sweep.
• Patience: The maximum number of bars allowed for a CISD confirmation to occur after a sweep has been detected.
• Trend Noise Filter: Adjusts the required strength of the price reaction to qualify as a valid reversal.

Appearance

• Bullish Colour: Sets the color for bullish signals, levels, and bar highlights.
• Bearish Colour: Sets the color for bearish signals, levels, and bar highlights.

FAQ

How do I interpret the dashed versus solid lines?

Dashed lines mark the historical liquidity level (swing high/low) that was swept, while the solid line marks the specific price level that triggered the Change in State of Delivery confirmation.

Can this be used for automated alerts?

Yes, the script includes alert conditions for both bullish and bearish swing failure patterns, which can be set to trigger once per bar close.

How do I access Swing Failure Signals?

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