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N Bar Reversal Detector

By LuxAlgoSep 4, 2024

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N Bar Reversal Detector extends the three-bar reversal into a configurable N-bar engine: you choose how many candles build the setup instead of settling for three. A bullish signal forms when an initial high bar leads a run of N-1 downtrending bars and the Nth bar's high takes out that first bar's high; the bearish case mirrors it at the lows. In Enhanced mode the Nth bar must close beyond the first bar's extreme, a stricter demand in the spirit of a key reversal, where the close does the confirming.

How to Trade the N Bar Reversal Detector?

  • Normal pattern: the Nth bar's extreme breaches the sequence's first bar, the earliest form of the reversal cue.
  • Enhanced pattern: the Nth bar closes beyond the first bar's extreme, trading immediacy for conviction.
  • Projected levels: patterns that confirm against price action draw support and resistance boundaries, reference points for entries, stops, and continuation checks.
  • Trend filter: show only patterns agreeing with the prevailing trend for continuation trading, or only counter-trend ones for fading, judged by your choice of Moving Average Cloud, Supertrend, or Donchian Channel.

The Min Percentage of Required Candles input decides how many of the first N-1 candles must lean the right way before a pattern qualifies, letting you tighten or relax detection to match conditions.

N Bar Reversal Detector Settings

  • Pattern Type: detect "Normal" patterns, "Enhanced" patterns, or both.
  • Sequence Length: the number of candles (N) forming the pattern.
  • Min Percentage of Required Candles: the share of the first N-1 candles that must align with the prior trend.
  • Dynamic Support and Resistance: enables or disables the projected levels.
  • Trend indicator settings: Moving Average Cloud type with fast/slow lengths, Supertrend ATR length and factor, and Donchian Channel length are each configurable.

Frequently Asked Questions

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