Next Pivot Projection

The Next Pivot Projection indicator is an experimental tool designed to forecast future price movements by projecting the next two pivot levels based on historical Zigzag data and divergence patterns. By analyzing price ratios and bar counts from previous market cycles, it provides potential price targets and timeframes for both confirmed and unconfirmed pivot points.

Usage

The Usage section highlights how traders can interpret the various labels and projections displayed on the chart:

• Pivot Projections: The script generates labels indicating the projected price and bar count for the next two pivots. The first projection is based on the current unconfirmed pivot, while the second is derived from the projected first pivot.
• Historical Clouds: Background clouds represent the historical ranges of pivot types (HH, HL, LH, LL). A green cloud above price indicates a bullish projection range, while a red cloud suggests bearish resistance areas based on average price ratios.
• Tooltips: By hovering over the projection labels, users can access detailed statistics including the number of occurrences for the specific pivot type and the average ratios used in the calculation.
• Sentiment Symbols: Small symbols next to pivot labels indicate the relationship between price action and momentum (e.g., convergence or divergence).

Details

The script extends the concepts of divergence backtesting by tracking the frequency and average ratios of High-Highs (HH), Higher-Lows (HL), Lower-Highs (LH), and Lower-Lows (LL). It operates on a multi-layered logic:

1. Zigzag Engine: Identifies trend changes based on the user-defined length.
2. Statistical Collection: Keeps a running tally of price and momentum ratios between consecutive pivots.
3. Unconfirmed Pivot Logic: The last point of a Zigzag is always unconfirmed (prone to repainting). However, its projection remains stable because it is calculated from the two preceding confirmed pivots.
4. Next Pivot Logic: The subsequent projection is based on the unconfirmed pivot; therefore, this specific projection may update if the unconfirmed pivot adjusts its position.

Settings

• Length: Adjusts the sensitivity of the Zigzag engine for identifying pivots.
• Oscillator: Select between several momentum indicators (CCI, RSI, MFI, etc.) to calculate divergences.
• Osc Length: Sets the lookback period for the chosen oscillator.
• Detailed Stats: Enables a table on the chart showing historical pivot occurrence data.
• Pivot Lines: Toggles the visibility of the primary Zigzag connections.
• Fill Bullish/Bearish Sentiments: Enables the background cloud filling based on historical projection ranges.

FAQ

How do I interpret the colored clouds? The clouds represent the "expected" zone for the next pivot based on historical averages. If price enters a green cloud above, it is moving within the typical range of a Higher High or Lower High based on previous data.

Why do some projections move? Projections that rely on the most recent (unconfirmed) pivot will shift if that pivot "repaints" to a new high or low before it is finalized.

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