Auto Analysis Short-term Reversals Exploration

The Auto Analysis Short-term Reversals Exploration indicator provides a comprehensive suite of automated pattern recognition tools designed to identify six distinct short-term price reversal setups on any timeframe.

Usage

The tool automatically scans for and labels six different reversal patterns based on price action and candle relationships. Traders can use these signals to identify potential pivot points in the market:

• Closing Price Reversals: Identified when price opens near one extreme and closes near the opposite extreme while making a specific high/low relationship with the previous bar.
• Hook Reversals: Occurs when price opens at an extreme and closes at the opposite, while the current bar is an "inside bar" relative to the previous range.
• Island Reversals: Detected when a gap exists between the current bar and the previous bar, following a prior gap in the opposite direction.
• Key Reversals: Significant reversal signals where price makes a new low (for bullish) or high (for bearish) but closes beyond the previous bar's high or low.
• Open/Close Reversals: Focuses on the relationship between the open and close positions within the bar's range in specific trending contexts.
• Pivot Point Reversals: Signals based on a 3-bar relationship where the middle bar forms a local high or low followed by a decisive close in the opposite direction.

Details

This script is based on the technical studies of Larry Lovrencic. It automates the detection of specific price action sequences that often precede short-term trend exhaustion. Each pattern uses distinct logic involving the bar's range (High-Low), the relative position of the Open and Close within that range, and comparisons to historical price levels.

The indicator also includes visual "Pivot Point" levels which track the closing prices of the most recent Pivot Point Reversal signals, acting as dynamic support and resistance references.

Settings

As this is an "Exploration" script designed for automated visual analysis, the primary configurations are managed through the style and alert menus:

• Style Visibility: Users can toggle individual reversal types (Closing Price, Hook, Island, Key, Open/Close, and Pivot Point) on or off to clean up the chart.
• Coloring: Customize the colors for bullish (Buy) and bearish (Sell) labels.
• Alerts: Configure alerts for any bullish or bearish reversal detection.

FAQ

How do I use these signals in my trading?

Reversal patterns are most effective when they occur at established support or resistance levels. They are often used as entry triggers after a trend has become overextended.

Can I filter which patterns are shown?

Yes, you can navigate to the indicator settings and use the "Style" tab to enable or disable specific reversal types depending on your preference.

How can I access Auto Analysis Short-term Reversals Exploration?

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