Reversal Pivot Points

The Reversal Pivot Points indicator identifies significant price levels where the market has previously experienced sharp reversals, establishing key areas of liquidity. By highlighting these specific zones, the tool helps traders recognize major support and resistance levels that remain active until price action effectively breaks through them.

Usage

The Reversal Pivot Points tool is designed for liquidity-based trading strategies. Users can identify levels where market makers may "chase" liquidity to fill orders.

• Liquidity Targeting: Traders can use these pivots as targets for price movement, as markets often gravitate toward established reversal zones.
• Reversal Trading: When price approaches a pivot, traders can look for confirmation (such as candlestick patterns or volume spikes) to trade a bounce.
• Perfect Levels (PDT/PDB): The indicator can highlight "Perfect Double Tops" or "Perfect Double Bottoms." These are considered unnatural in fluid markets and often indicate heavy liquidity that is likely to be swept or broken if price returns to the level.
• Multi-Timeframe Analysis: By setting a higher Pivot Timeframe, you can view major institutional levels on lower-timeframe charts for more precise entries.

Details

Unlike standard pivot points or static support/resistance, these pivots are dynamic and interact with current price action.

• Liquidity Consumption: A key feature of this script is that pivots are automatically removed from the chart once they are violated. This ensures the chart only displays "unfilled" liquidity zones.
• Invalidation Logic: Users can choose between a simple touch violation or a "Remove On Close" (ROC) logic. ROC ensures that a level is only considered broken if a candle closes beyond it on a specified timeframe, preventing premature removals due to simple price wicks.

Settings

Pivot Settings

• Pivot Timeframe: Determines the timeframe used to calculate the reversal pivots.
• Left Bars Limit: Sets the number of bars to the left required to confirm a pivot, preventing clusters of pivots.
• Right Bars Limit: Sets the number of bars to the right required to confirm the reversal.
• Remove On Close (ROC): When enabled, pivots are only deleted if the price closes past the level.
• ROC Timeframe: Specifies which timeframe's closing price is used for the ROC logic.
• Wait For Close: If active, the script waits for the current candle to close before removing a broken level.

Line & Text Settings

• Enable Resistance/Support Pivots: Toggle the display of bearish or bullish levels.
• Line Extension Type: Controls how lines extend across the chart (None, Left, Right, Both).
• Line Offset: Offsets the line and label position from the current bar for better visibility.
• Line Style: Choose between solid, dotted, dashed, or arrow styles.
• Display Level: Shows the exact price value next to the pivot.
• Display Perfect Level: Labels levels where price has perfectly rejected (PDT/PDB).

FAQ

How do I use the Reversal Pivot Points?

You can use the indicator to find areas where price is likely to react or to set targets for current trends. By observing how price behaves at these "liquidity" levels, you can find high-reward reversal opportunities.

What are PDB and PDT labels?

PDB stands for Perfect Double Bottom and PDT stands for Perfect Double Top. These appear when the market rejects a level with tick-perfect precision, often signaling a significant liquidity pool that may eventually be swept.

How can I access this script?

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