Dynamic Trend Pivots

The Dynamic Trend Pivots indicator provides a conviction-driven trend detection and structural level mapping system that tracks directional price commitment through a pulse accumulation engine. It adaptively maps exhaustion levels and trend boundaries based on real-time bar-level conviction rather than lagged moving averages or static volatility thresholds.

Usage

The Usage section describes how the script can be used to identify trend shifts and structural reversal zones.

• Trend Identification: A bullish state is established when price closes above the adaptive upper band (plotted with green signals), and a bearish state is established when price closes below the lower band (plotted with magenta signals).
• Conviction Analysis: Use the band width and candle coloring to gauge trend strength. Tight bands and vibrant candles indicate high pulse saturation (strong conviction). Wide bands and faded candles indicate momentum exhaustion and a potential trend shift.
• Structural Support/Resistance: Exhaustion zones (ATR-scaled boxes) represent price points where prior momentum peaked before collapsing. These act as high-conviction structural reference points for future price interactions.
• Retest Signals: Small star diamonds appear when price re-enters an active exhaustion zone after the initial formation. These can be used to identify potential continuation or reversal entries within proven conviction regions.

Details

The indicator is built upon a conviction-weighted pulse tracking framework that distinguishes between price displacement and genuine directional commitment.

• Pulse Accumulation Engine: Evaluates each bar's close position within its range. A "conviction bar" must close in the upper or lower fraction (configurable) of its range to increment the pulse counter.
• Saturation Measurement: The pulse counter is normalized relative to a cap. This saturation value determines the adaptive behavior of the bands.
• MAD Adaptive Bands: The bands use Mean Absolute Deviation (MAD) scaled by a dynamic multiplier. During high saturation, the multiplier decreases to tighten the bands; during exhaustion, the multiplier increases to expand them.
• Exhaustion Level Lifecycle: When saturation drops significantly from a recent peak, the script "plants" an exhaustion level at the price where that peak occurred. These levels are managed dynamically and are removed if price closes beyond the zone with an ATR-based buffer.

Settings

Pulse Engine

• Trend Length: The lookback period for the EMA-based trend baseline.
• Close Zone: The fraction of the bar range (e.g., top/bottom 30%) where a close must occur to be classified as a conviction bar.
• Pulse Decay: The rate at which accumulated pulse fades in the absence of conviction bars.
• Pulse Cap: The maximum value for the pulse counter before reaching full saturation.

Adaptive Bands

• MAD Length: Lookback for the Mean Absolute Deviation volatility calculation.
• Band Min (Saturated): The band multiplier used when the trend is at maximum conviction (tightest).
• Band Max (Exhausted): The band multiplier used when conviction has decayed (widest).
• Line Smoothing: Options for SMA, EMA, HMA, or ALMA smoothing for visual band lines.

Exhaustion Levels

• Exhaustion Drop: The percentage drop from a saturation peak required to trigger a new exhaustion level.
• Max Levels: The maximum number of active exhaustion boxes displayed on the chart.
• Break Buffer (ATR): A multiplier of ATR required to close past a zone to consider it invalidated.
• Retest Cooldown: The minimum number of bars required between retest signals on the same level.

FAQ

How does the indicator define a "conviction" bar? A conviction bar is defined by the close's position relative to its high-low range. For example, a bullish conviction bar must close in the top 30% of its range while also being an "up" bar (close > open).

Why should I disable original chart candles? The script includes an optional "Color Candles" setting that overlays trend-specific coloring (fading based on saturation). To see these colors clearly without visual overlap, you should disable the default candles in your platform's chart settings.

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