Mervin 2025 Predictive BOS Reversal Detector

Objective of the Script
To help traders predict and confirm market reversals using a combination of candlestick alignment, BOS logic, and trend strength indicators (CCI & ATR).


How the Script Works – Step-by-Step
Step 1: Detect Body Alignment Reversal
This step checks if the current candlestick is a potential reversal, defined as:

Opposite direction to the previous candle, and

Body alignment, meaning the previous close is nearly equal to the current open within a small tolerance.

✅ Conditions:
Bullish reversal: Previous candle is red (down), current candle is green (up).

Bearish reversal: Previous candle is green (up), current candle is red (down).

Aligned: abs(prevClose - currOpen) <= tolerance

If both alignment and reversal are detected:

A potential bullish BOS or potential bearish BOS is predicted.

📍 Displayed on Chart:

🔶 Orange triangle up = predicted bullish BOS

🔶 Orange triangle down = predicted bearish BOS

Step 2: Predict and Confirm Break of Structure (BOS)
Once a reversal is predicted, the script waits for a break above or below a key level from the previous candle:

Bullish BOS confirmed if the price breaks above the previous high.

Bearish BOS confirmed if the price breaks below the previous low.

📍 Displayed on Chart:

✅ Green label up = confirmed bullish BOS

❌ Red label down = confirmed bearish BOS

Step 3: Alerts
The script includes alerts that can be turned on in TradingView:

Predict Bullish BOS – potential long opportunity

Predict Bearish BOS – potential short opportunity

Confirmed BOS Bullish – confirmation to enter or add to a long

Confirmed BOS Bearish – confirmation to enter or add to a short

Step 4: Candle Strength and Forecast Bias Table
This section provides trend strength analysis using:

Candle strength: Percentage change from open to close

CCI (Commodity Channel Index): Detects trend direction and strength

ATR (Average True Range): Measures volatility

Bias Logic:
Buy: CCI is positive, increasing, and ATR is rising.

Sell: CCI is negative, decreasing, and ATR is rising.

Wait: No clear signal.

📍 Displayed on Chart:
A table in the top-right corner shows:

Candle strength and label (Bullish/Bearish)

Bias with color coding: ✅ Lime (Buy), ❌ Red (Sell), ⚪ Gray (Wait)


🛠️ Inputs You Can Customize
Input Name Description Default
Alignment Tolerance How closely previous close should match current open to consider aligned 0.01
Predict BOS within next N bars Number of bars to watch for BOS confirmation 2
CCI Length Period for CCI calculation 20
ATR Length Period for ATR calculation 14

🧭 Trading Strategy – Steps to Use
🔍 Step 1: Watch for BOS Prediction
Look for orange triangle up/down on the chart.

This is your heads-up for a potential reversal.

✅ Step 2: Wait for BOS Confirmation
Only trade if:

Price breaks above the high (for bullish) or below the low (for bearish) of the previous bar.

You’ll see green/red labels on the chart.

🛒 Step 3: Entry
Bullish Entry (Long):

After confirmed bullish BOS

Bias table shows "Buy"

Bearish Entry (Short):

After confirmed bearish BOS

Bias table shows "Sell"

🎯 Step 4: Stop Loss and Take Profit
Use ATR to gauge volatility and set stop loss.

Example: SL = Entry ± 1.5x ATR

Consider previous swing high/low for take profit levels.

🔔 Step 5: Set Alerts
Turn on alerts in TradingView to be notified of predictions and confirmations.