1-2-3 Reversal Map

The 1-2-3 Reversal Map indicator provides a structured overlay for identifying, tracking, and validating classic 1-2-3 reversal formations. It maps the full lifecycle of the setup—from initial swing points to neckline confirmation and retest zones—to help traders visualize price action structure without chart clutter.

Usage

The Usage section describes how the script can be used to monitor the progression of a reversal. Traders can use this tool to filter out market noise and focus on high-probability structural shifts.

• Identifying Structure: The script automatically numbers Point 1 (extreme), Point 2 (neckline), and Point 3 (retracement). A valid structure is "Armed" when Point 3 holds without invalidating Point 1.
• Confirming Breakouts: Once price closes beyond the Point 2 neckline (with a configurable ATR buffer), the structure is marked as "Broken." This confirms the 1-2-3 reversal map.
• Monitoring Retests: After confirmation, a "Retest Pocket" is projected. Traders can observe if price returns to this zone and holds, providing a context-native area for evaluating secondary entries.
• Comparing Quality: Use the built-in Reversal Score to compare different 1-2-3 setups. A higher score indicates better symmetry, stronger breakout momentum, and cleaner retracement levels.

Details

The script utilizes confirmed pivot points to ensure structural reliability, meaning points only appear after a specified number of confirmation bars.

• Bullish Sequence: Requires a swing low (P1), a recovery high (P2), and a higher low (P3).
• Bearish Sequence: Requires a swing high (P1), a reaction low (P2), and a lower high (P3).
• Reversal Score Logic: The scoring engine evaluates the P1-P2 leg size, the quality of the P3 hold, time symmetry between legs, and breakout candle characteristics (body quality and volume participation).
• Visual Clarity: To maintain a clean interface, numbered labels only appear for the latest active structure, while older traces are softened or removed based on user settings.

Settings

1-2-3 Structure

• Pivot Left/Right Bars: Determines the maturity required for a swing point to be recognized.
• Minimum P1-P2 Leg ATR: Filters out micro-movements by requiring a minimum distance for the initial leg.
• Minimum Point 3 Hold ATR: Sets the required distance between P3 and P1 to ensure a valid structural hold.
• Min/Max P3 Retracement: Defines the acceptable percentage range for the P3 retracement relative to the P1-P2 leg.

Breakout and Retest

• Neckline Break Buffer ATR: A safety margin beyond the neckline that price must clear for a confirmed break.
• Retest Pocket Width ATR: Sets the vertical height of the retest zone around the broken neckline.
• Retest Window Bars: Limits the time price has to return to the pocket for it to be considered a valid retest.
• Use Volume In Score: Toggles whether breakout volume relative to its average affects the final quality score.

Visuals and Panel

• Show Context Tags: Toggles labels for "Neckline" and "Retest Pocket" for easier identification.
• Show Recent Structure Traces: Enables a rolling history of previous structures to provide historical context.
• Panel Location/Size: Adjusts the position and font size of the AG Pro status dashboard.

FAQ

How do I interpret the Reversal Score? The score (0-100) ranks the internal quality of the 1-2-3 structure based on symmetry and momentum. It is a comparative tool for ranking setups, not a predictive signal of future success.

Why did my Point 3 label disappear? A label will disappear if the structure is invalidated (e.g., price moves past Point 1 before a breakout) or if a newer, more relevant 1-2-3 structure is detected.

How do I get access to this indicator? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.