BulletProof Long Wick Reversal Markers with Lines

The BulletProof Long Wick Reversal Markers with Lines indicator identifies potential price reversals by detecting long-wick candles at swing highs and lows that are followed by a significant price move. This tool helps traders pinpoint exhaustion points and establish dynamic support and resistance levels based on these key historical reversals.

Usage

The indicator plots markers and extending lines based on specific price action criteria:

• Bearish Reversal Markers: Represented by circles at swing highs (default red). These appear when a candle has a significant upper wick relative to its body and price subsequently drops by a user-defined percentage.
• Bullish Reversal Markers: Represented by circles at swing lows (default green). These appear when a candle has a significant lower wick relative to its body and price subsequently rises by a user-defined percentage.
• Dynamic Levels: Horizontal lines extend from each marker to the right. These lines serve as visual references for potential resistance (from tops) or support (from bottoms) levels.

Traders can use these markers to confirm entries in trending markets or to identify high-probability exit zones when price returns to these significant wick levels.

Details

The script utilizes pivot high and pivot low logic to identify local extremes. It specifically filters for "wick-heavy" candles, often referred to as shooting stars or hammers, by calculating the ratio between the wick length and the candle body size. To ensure the marker represents a valid reversal rather than a minor fluctuation, the script checks the price action over the subsequent bars (defined by the "Right Bars" setting) to confirm that a minimum percentage move has occurred.

Settings

• Left Bars: The number of bars to the left required to confirm a pivot high or low.
• Right Bars: The number of bars to the right required to confirm a pivot and calculate the subsequent reversal move.
• Wick to Body Ratio: The minimum ratio of the wick length to the candle body size required for a marker to appear.
• Min Reversal Move %: The minimum percentage move the price must make following the pivot candle to validate the reversal.
• Show Only Last Days: Limits the display of markers to a specific number of recent days to keep the chart clean. Set to 0 to show all historical markers.
• Top Marker Color: Customizes the color of bearish reversal circles and lines.
• Bottom Marker Color: Customizes the color of bullish reversal circles and lines.
• Line Style: Choose between Solid, Dashed, or Dotted lines for the horizontal extensions.

FAQ

How do I use these lines in my strategy? The lines act as historical points of interest where significant selling or buying pressure was previously encountered. They are often used as targets for take-profits or as areas to look for secondary rejection entries.

Does this indicator repaint? Because the script relies on pivot points with a "Right Bars" confirmation, the markers and lines will appear only after the specified number of confirmation bars have closed. This ensures that the reversal move has actually taken place before the signal is confirmed.

How can I access the BulletProof Long Wick Reversal Markers with Lines? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.