Reversal Scalper

The Reversal Scalper indicator provides a noise-reduced approach to identifying potential market turning points by combining smoothed stochastic logic with volatility-based bands.

Usage

The indicator consists of a "Reversal Strength Meter" (an oscillator) and a visual "Trend Ribbon" (background/overlay bands) to help traders identify supply and demand imbalances.

Buy Setup

• Observe the oscillator line dipping below the 20 level (Demand Zone).
• Wait for the line to cross back above 20.
• Look for bullish price action or candlestick patterns.
• Traders often set a stop loss below the recent pattern low and target a positive risk-reward ratio.

Sell Setup

• Observe the oscillator line rising above the 80 level (Supply Zone).
• Wait for the line to cross back below 80.
• Look for bearish price action or candlestick patterns.
• Traders often set a stop loss above the recent pattern high and target a positive risk-reward ratio.

The Trend Ribbon provides additional context regarding the current market environment, highlighting areas where price may be overextended or trending.

Details

The script utilizes a smoothed Stochastic Oscillator (K length of 8, smoothing of 5) to track momentum shifts without the high-frequency noise of traditional oscillators. Additionally, it incorporates ATR-based volatility bands to visualize trend exhaustion.

The logic uses a tracking mechanism for relative highs and lows (AMP and DEV_FACTOR settings) to determine the orientation of the trend ribbons. When the price violates specific average thresholds, the ribbon switches state, signaling a potential shift in the intraday trend.

Settings

Styles

• Reversal Strength Meter Color: Adjusts the color of the main oscillator line.
• Buy Ribbon Color: Adjusts the color of the lower bullish trend band.
• Sell Ribbon Color: Adjusts the color of the upper bearish trend band.

FAQ

How do I use the Reversal Scalper?

The indicator is used to identify reversals when the Reversal Strength Meter exits the overbought (80) or oversold (20) zones, preferably in alignment with price action.

Is this indicator repainting?

No, the script is designed to be non-repainting and is compatible across various timeframes and asset classes.

How do I get access to Reversal Scalper?

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