PivotBoss Wick Reversal Setup

The PivotBoss Wick Reversal Setup indicator is a candlestick pattern recognition tool designed to identify high-probability reversal points based on the relationship between a candle's body and its wicks. It automates the detection of specific "tail" or "wick" formations that signify a sharp rejection of price at trend extremes.

Usage

The indicator identifies two primary signals:

• Bullish Wick Reversal: Occurs when a candle has a long lower wick and closes near the top of its range. This suggests that while sellers tried to push price lower, responsive buyers entered the market aggressively, perceiving the asset as undervalued.
• Bearish Wick Reversal: Occurs when a candle has a long upper wick and closes near the bottom of its range. This suggests that buyers failed to maintain higher prices as sellers overwhelmed them, indicating potential overvaluation.

These signals are most effective when they appear at key pivot levels, support/resistance zones, or after an extended trend. Users can look for these triangles on the chart as potential entry points for mean-reversion trades.

Details

The script is based on the technical analysis concepts popularized by "PivotBoss," focusing on the psychology of price rejection. Rather than relying on traditional candlestick names like "Hammer" or "Shooting Star," it uses a mathematical approach to define a "reversal wick":

1. Wick Ratio: The rejection wick must be significantly larger (default 2.5x to 3.5x) than the candle body.
2. Close Location: The closing price must be within a specific percentage of the candle's total range (top 35% for bullish, bottom 35% for bearish).

This logic ensures that only candles with a clear "excess" or "tail" are flagged, representing a significant shift in market control within a single period.

Settings

• Wick Multiplier: Determines how many times larger the wick must be compared to the body. Increasing this value filters for more extreme rejections.
• Close Value Percent: Sets the threshold for where the candle must close relative to its range. A lower value (e.g., 0.20) requires a tighter close near the extreme, filtering for stronger rejection sentiment.

FAQ

How do I interpret the signals from the PivotBoss Wick Reversal Setup?

Bullish signals are represented by green triangles below the bar, indicating a potential upward reversal. Bearish signals are represented by red triangles above the bar, indicating a potential downward reversal.

What timeframes work best for this indicator?

While it can be used on any timeframe, it is particularly powerful on higher timeframes (1H, 4H, Daily) where candlestick psychology carries more weight and market "noise" is reduced.

How can I access the PivotBoss Wick Reversal Setup?

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