Quarterly Theory ICT 03 Precision Swing Points

The Quarterly Theory ICT 03 Precision Swing Points indicator identifies precise market turning points by detecting divergence patterns in candle closures between correlated assets.

Usage

The Usage section describes how the script can be used to identify market reversals through the Precision Swing Point (PSP) pattern. This pattern occurs when price behavior between two correlated assets (such as Gold and Silver) diverges at key structural levels.

Bullish PSP

A Bullish PSP occurs when an asset breaks a previous low and its middle candle closes bearish, while a correlated asset's candle closes bullish at the same point. This signals weakness in the downtrend. Traders often look for entries when the price returns to the wick of the PSP candle, particularly if it aligns with a Fair Value Gap or Order Block.

Bearish PSP

A Bearish PSP forms when an asset breaks a previous high and its middle candle closes bullish, while the correlated asset closes bearish. This divergence indicates exhaustion in an uptrend. Traders typically use the wick of the PSP candle as a resistance zone for short entries with a tight stop-loss.

Details

The indicator is rooted in Smart Money Concepts (SMC) and the Quarterly Theory, focusing on high-probability reversal zones. It uses pivot logic and Change of Character (ChoCh) to establish trend context before identifying divergences. By comparing candle closures rather than just high/low wicks, the PSP provides a "filtered" view of market intent, reducing the noise often found in standard price action.

Settings

Precision Swing Logical Setting

• Mode: Choose between "2 Symbol" or "3 Symbol" mode to detect divergences across two or three correlated assets.
• Second Symbol: Defines the first correlated asset used for comparison.
• Third Symbol: Defines the additional asset used when in 3-symbol mode.

Precision X Point Filter Setting

• Filter Precision X Point: When enabled, the tool only identifies PSP signals if the base asset's candle qualifies as a Pin Bar.
• Trend Effect: If "On," signals are only shown if they align with the current trend direction. If "Off," all patterns are displayed.
• Trend Direction Period: Adjusts the lookback period for trend identification; higher values focus on higher timeframe trends.
• Pin Bar Ratios: A series of sensitivity settings (Ratio Body to Shadow, etc.) that allow users to define the strictness of the Pin Bar filtering.

Display Setting

• Show Bullish/Bearish PSP: Toggles the visibility of PSP labels on the chart.
• Show Bullish/Bearish PCP: Toggles the visibility of Precision Continuation Points.
• Show Table/Correlation: Enables a visual dashboard to track correlation strengths and signal counts.

FAQ

How do I use the "3 Symbol" mode?

The 3-symbol mode is designed for complex correlation analysis, such as comparing the EURUSD, GBPUSD, and DXY simultaneously to find the strongest divergence confirmation.

Can I use this for scalping?

Yes, the indicator is effective on lower timeframes like the 5-minute and 15-minute charts, especially when used to find entries in the direction of the higher timeframe trend.

How do I access this indicator?

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