Zen MIG Reversal V1

The Zen MIG Reversal V1 indicator highlights rare, pattern-based reversal setups to help traders visually identify potential turning points following strong momentum or gap-style price action.

Usage

The indicator can be used to spot specific 3-bar reversal patterns relative to an Exponential Moving Average (EMA). Traders can use these signals for discretionary price action analysis, identifying momentum shifts, or as a confluence factor in a broader trading strategy.

• Bullish Reversal: Identified when three consecutive bullish candles occur, where the low of the third bar is above the high of the first bar but remains below the EMA. This signal is marked by a light blue box across the 3-bar range and an optional blue arrow.
• Bearish Reversal: Identified when three consecutive bearish candles occur, where the high of the third bar is below the low of the first bar but remains above the EMA. This signal is marked by a light red box across the 3-bar range and an optional red arrow.

Details

The script focuses on "gap-style" momentum moves where price aggressively moves away from a starting point but remains in a specific relationship with a trend-following baseline (the EMA). By requiring three consecutive bars of the same direction and specific price level overlaps (or lack thereof), it filters for unique momentum clusters that often precede mean reversion or trend exhaustion.

Settings

• EMA Length: Sets the period for the reference Exponential Moving Average.
• Show EMA Line: Toggles the visibility of the primary EMA on the chart.
• Show Arrows: Toggles the display of signal arrows on the chart.
• Offset: Adjusts the horizontal offset of the plots.
• Smoothing Group:
  • Method: Allows selection of the moving average type (SMA, EMA, SMMA, WMA, VWMA) for an internal smoothing line.
  • Length: Sets the lookback period for the smoothing calculation.

FAQ

How do I use the Zen MIG Reversal V1?

The tool is best used to identify specific price action patterns that suggest a reversal after a momentum burst. Look for the colored boxes and arrows as signals for potential turning points.

What do the boxes represent?

The boxes highlight the price range from the start to the end of the detected 3-bar pattern, providing a visual area of interest where the momentum shift occurred.

How can I access the Zen MIG Reversal V1?

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