Significant PP - Swing Failure / Stop Run Alerts

The Significant PP - Swing Failure / Stop Run Alerts indicator identifies potential trend reversals by detecting swing failure patterns and stop runs based on significant pivot points. It provides traders with timely alerts when price breaches a key level but fails to sustain the breakout, suggesting a potential trap or liquidity grab.

Usage

The Usage section focuses on identifying price levels where liquidity might be resting. Traders can use this tool to:

• Detect Swing Failures: A bearish signal (SF Top) occurs when the price crosses above a significant pivot high but closes back below it, indicating a failed breakout.
• Identify Stop Runs: A bullish signal (SF Bottom) occurs when the price dips below a significant pivot low but closes back above it, suggesting that sell stops were triggered before a reversal.
• Filter Reversals: By adjusting the ATR multiplier, users can filter out minor price fluctuations and focus on more significant level breaches.

Details

The script is built upon the logic of "Significant Pivot Reversals." Unlike standard pivot points that only look at bar highs and lows, this indicator incorporates an ATR-based threshold to determine if a pivot is truly "significant."

The core logic for a Swing Failure detection requires:

1. A established significant pivot level (High or Low).
2. The current bar's high/low must breach the pivot level by a user-defined ATR distance (SF ATR Mult).
3. The previous close must be on the "safe" side of the pivot.
4. The current close must return to the "safe" side of the pivot.

Settings

• PP Left Bars: The number of bars to the left required to confirm a pivot point.
• PP Right Bars: The number of bars to the right required to confirm a pivot point.
• ATR Length: The lookback period used for the Average True Range calculation.
• PP ATR Mult: A multiplier used to determine the significance of the initial pivot points.
• SF ATR Mult: A multiplier that defines the minimum distance the price must travel beyond the pivot level to trigger a Swing Failure/Stop Run alert.

FAQ

How do I use this indicator? You can use the signals to identify potential counter-trend opportunities or to avoid getting trapped in false breakouts at key historical levels.

Can I change the sensitivity of the alerts? Yes, increasing the "SF ATR Mult" will require price to push further past the pivot before a signal is triggered, while "PP Left/Right Bars" changes how significant the base pivots are.

How can I access the Significant PP - Swing Failure / Stop Run Alerts? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.