# Reversal Signals A counter-trend engine that counts candle closes through two phases (a 9-count Momentum Phase and a 13-count Trend Exhaustion Phase) to flag where a move may be running out of fuel. Completed counts print long and short setups with support, resistance, and risk levels, giving reversal traders a rules-based framework for timing turns. - Indicator in the LuxAlgo Library, by LuxAlgo, published Jun 14, 2023. - Access: free. - Concepts: [Trend Exhaustion](https://www.luxalgo.com/library/concept/trend-exhaustion/) (primary), [Reversal](https://www.luxalgo.com/library/concept/reversal/) - Open on Vela: https://vela.luxalgo.com/chart?pineScriptCodeId=cmpwn5aoz007gvhsgic3oa78o - Page: https://www.luxalgo.com/library/indicator/reversal-signals/ **Reversal Signals** is the LuxAlgo counter-trend engine: it counts candle closes against fixed reference bars to flag where a directional push may be exhausting. Two phases structure every signal: a Momentum Phase seeking a completed 9-count (occasionally validated on the 8th candle), where each close must beat the close from four bars before, and a Trend Exhaustion Phase that follows with a 13-count judged against the close two bars back. The phases behave differently by design. Momentum aborts the moment its four-bar condition fails, while the exhaustion count tolerates interruptions, pauses if a fresh momentum phase appears mid-count, and extends until the 13th qualifying candle prints: the slower, higher-conviction read on [trend exhaustion](https://www.luxalgo.com/library/concept/trend-exhaustion/). ## How to Trade the Reversal Signals? - **Momentum trades**: act after a completed momentum phase, ideally where the count finishes into support or resistance. - **Exhaustion trades**: completed 13-counts target deeper trend fatigue and more durable turns. - **Qualified trades**: an exhaustion phase completing alongside a momentum phase is the strongest setup class. - **L / S labels**: long and short suggestions print on the chart, with cautionary markers when price action argues for continuation instead. Alerts are available for phase completions, level crossovers, and activated setups. Counter-trend entries fail fast when a trend refuses to die, so confirm signals with independent analysis. ## What the Reversal Signals Shows Numbered counts print above or below candles as each phase progresses, letting a setup mature in plain sight. Completed phases leave levels to trade against: support and resistance lines plus stop/risk thresholds for trade management. Display options cover full phases or completions only. ## Frequently Asked Questions ### Does an interrupted count start over? A momentum count does: one failed four-bar comparison cancels it. The exhaustion count is deliberately more forgiving: interruptions pause progress rather than erase it, and counting resumes until candle 13 confirms. ### Should I pair the counts with other confirmation? Yes. Counts locate candidates, not certainties, so most traders demand agreement from structure or candles. A tool like [Reversal Candlestick Structure](https://www.luxalgo.com/library/indicator/reversal-candlestick-structure/) covers the candlestick side of that checklist. ### What does access to Reversal Signals cost? Nothing. It sits in the free LuxAlgo Library collection, and from this page you can also load it into Quant, our coding agent, to experiment with the counts. You can also copy the source code from this page and run it anywhere Pine Script® runs. ## Related indicators - [Sequencer](https://www.luxalgo.com/library/indicator/sequencer/) (Trend Exhaustion): markdown at https://www.luxalgo.com/library/indicator/sequencer.md - [Reversal Candlestick Structure](https://www.luxalgo.com/library/indicator/reversal-candlestick-structure/) (Reversal): markdown at https://www.luxalgo.com/library/indicator/reversal-candlestick-structure.md - [Reversal Probability Rows](https://www.luxalgo.com/library/indicator/reversal-probability-rows/) (Reversal): markdown at https://www.luxalgo.com/library/indicator/reversal-probability-rows.md - [Significant Breakout Levels (FVG)](https://www.luxalgo.com/library/indicator/significant-breakout-levels-fvg/) (Breakout): markdown at https://www.luxalgo.com/library/indicator/significant-breakout-levels-fvg.md - [Gap Fill Breakouts](https://www.luxalgo.com/library/indicator/gap-fill-breakouts/) (Breakout): markdown at https://www.luxalgo.com/library/indicator/gap-fill-breakouts.md - [Retest & Break Setup](https://www.luxalgo.com/library/indicator/retest-break-setup/) (Retest): markdown at https://www.luxalgo.com/library/indicator/retest-break-setup.md - [9:30 AM 15m Fib Breakout](https://www.luxalgo.com/library/indicator/9-30-am-15m-fib-breakout/) (Breakout): markdown at https://www.luxalgo.com/library/indicator/9-30-am-15m-fib-breakout.md - [Opening Range with Breakouts & Targets](https://www.luxalgo.com/library/indicator/opening-range-with-breakouts-targets/) (Breakout): markdown at https://www.luxalgo.com/library/indicator/opening-range-with-breakouts-targets.md --- Source: https://www.luxalgo.com/library/indicator/reversal-signals/ (LuxAlgo Library). Free to use with attribution: https://www.luxalgo.com/library/license/