Isolated Peak and Bottom (Tuncer ŞENGÖZ) by KıvanÇ fr3762

The Isolated Peak and Bottom indicator provides a systematic method for identifying trend reversals by isolating local price extremes and confirming them through specific breakdown or breakout levels.

Usage

The Isolated Peak and Bottom indicator is primarily used to distinguish between temporary market corrections and the actual end of a trend. It generates visual signals on the chart to alert traders of potential exhaustion points in both bullish and bearish environments.

• Isolated Peaks (PEAK1, PEAK2): These signals suggest that an uptrend may be concluding. The script identifies a high that is relatively higher than the surrounding bars. A reversal signal is confirmed if the price breaks below the designated signal level (the low of the preceding days) within a short window.
• Isolated Bottoms (BOT1, BOT2): These signals suggest that a downtrend may be concluding. The script identifies a low that is relatively lower than the surrounding bars. A reversal signal is confirmed if the price breaks above the designated signal level (the high of the preceding days) within a short window.

Because market movements are fractal, this technique can be applied to various timeframes, including intraday, daily, or weekly charts.

Details

The technique was developed by Tuncer Şengöz and implemented by Kıvanç Özbilgiç. The core logic relies on the "isolation" of a price extreme. For a peak to be considered "isolated," it must be the highest point of the trend up to that point, specifically outperforming the highs of the bars immediately preceding and following it.

The indicator uses a specific comparison of five consecutive bars to determine isolation. Once an isolated point is found, the script monitors the "signal level"—the low of the day before the peak (for downtrend signals) or the high of the day before the bottom (for uptrend signals). If the market breaches this signal level within two bars, the trend is assumed to have shifted. This rapid confirmation helps traders avoid "fakeouts" where a new high is made but the trend remains intact.

Settings

This indicator utilizes a fixed mathematical methodology based on the author's original technique and does not require manual parameter adjustments. The visual output is handled through the following plot elements:

• BOT1 / BOT2: Green labels appearing below the bars to indicate a confirmed Isolated Bottom.
• PEAK1 / PEAK2: Red labels appearing above the bars to indicate a confirmed Isolated Peak.

FAQ

Which timeframes are most suitable for this indicator? The technique is designed to be scale-invariant, meaning it can be used on yearly, daily, or intraday charts. This is due to the fractal nature of market price action.

What is the difference between the "1" and "2" labels (e.g., PEAK1 vs PEAK2)? These labels correspond to different internal calculation conditions (izoTepe1/2 or izoDip1/2) based on the specific arrangement of the five-bar sequence and which bar in the sequence triggered the breakdown or breakout.

How can I access the Isolated Peak and Bottom indicator? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.