Swing Failure Pattern SFP SFP ICT Strategy

The Swing Failure Pattern SFP SFP ICT Strategy indicator identifies potential trend reversals by detecting failed attempts to breach key support or resistance levels, commonly known as "Fake Breakouts."

Usage

The Swing Failure Pattern (SFP) is a popular price action strategy used to spot false breakouts and liquidity sweeps. It occurs when the price moves beyond a previous high or low but fails to sustain that level, quickly reversing back. Traders use this to identify "stop hunts" where liquidity is harvested before a significant move in the opposite direction.

• Bullish SFP: Occurs when price dips below a prior swing low but fails to close below it (or quickly recovers), signaling seller exhaustion and a potential upward reversal.
• Bearish SFP: Occurs when price rises above a prior swing high but fails to hold, signaling buyer exhaustion and a potential downward reversal.

Traders can use these signals to enter trades at exhaustion points with favorable risk-to-reward ratios. The indicator automatically plots dashed lines connecting the failed swing level to the reversal point for clear visual confirmation.

Details

This tool distinguishes between two primary types of patterns:

• Real SFP: The price breaks a level but fails to close beyond it, reversing immediately. This is generally considered a higher-probability signal.
• Considerable SFP: The price may close slightly beyond the level but declines or rises back through it very quickly. The script utilizes pivot point logic to identify significant swing highs and lows and monitors them for specific price action behavior (wicks or rapid reversals) to confirm the pattern.

Settings

Logical Settings

• Swing Period: Determines the lookback period used to identify the initial pivot highs and lows.
• SFP Type: Allows users to filter for "All", "Real SFP", or "Considerable SFP" signals.
• Max Swing Back Method: Choose between "All" (checks all historical swings) or "Custom" (limits the search to a specific number).
• Max Swing Back: The number of historical swings to monitor when the custom method is selected.
• Back to Break-Even Period: Defines the window of time in which the price must return to the original level to qualify as an SFP.

Display Settings

• Show All SFP: Toggles the visibility of all detected patterns.
• Show High/Low SFP: Individual toggles for bullish or bearish signals.
• Color Settings: Customization options for label text and dashed signal lines.

Alert Settings

• Alert: Enable or disable automated notifications.
• Long/Short Position Message: Editable text areas to customize the message sent during a bullish or bearish alert.

FAQ

How do I use this indicator? You should look for the H SFP (High) or L SFP (Low) labels on your chart. These indicate that a previous swing level was breached and rejected, suggesting a potential reversal trade in the opposite direction.

What is the difference between Real and Considerable SFP? A "Real SFP" is more conservative, requiring that the candle fails to close beyond the level. A "Considerable SFP" is more aggressive and allows for a slight close beyond the level followed by an immediate reversal.

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.