Break/Reversal/Touch
Jun 3, 2021
The Break/Reversal/Touch indicator identifies key price interactions with higher timeframe closing levels through candlestick engulfing patterns, touches, and trend reversals.
Usage
This tool can be used to identify potential entry or exit points based on how price reacts to Daily, Weekly, and Monthly closing levels.
- Break Signals: Occur when a candle closes beyond a timeframe level while simultaneously forming an engulfing pattern. These are marked as "D", "W", or "M" on the chart.
- Touch Signals: Triggered when a candle's high or low interacts with a timeframe level without necessarily closing past it, provided an engulfing pattern is present. These are labeled as "Touch" (e.g., "D Touch").
- Reversal Signals: Appear when a subsequent candle breaks a level in the opposite direction of a previous break while maintaining an engulfing formation. These are labeled as "Reverse" (e.g., "W Reverse").
Details
The indicator utilizes non-repiling security calls to fetch the closing prices of Daily, Weekly, and Monthly timeframes. It combines these static horizontal levels with price action logic—specifically engulfing candles—to filter for high-conviction momentum shifts.
The logic requires:
- Level Interaction: Price must cross or touch the calculated HTF close.
- Candlestick Pattern: A valid bullish or bearish engulfing candle must form to validate the signal.
Settings
- Show Plot Lines: Toggles the visibility of the Daily, Weekly, and Monthly closing price lines on the chart.
FAQ
How do I use the Break/Reversal/Touch indicator?
You can use it to find confluence between horizontal support/resistance levels (HTF closes) and price action patterns (engulfing candles) to spot trend continuations or reversals.
What timeframes does it track?
The script automatically tracks Daily, Weekly, and Monthly closing levels regardless of the timeframe you are currently viewing.
How can I access this tool?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
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