[blackcat] L1 Swing Reversal Indicator

24 Mac 2021

Level: 1

Background

Many asked me about swing reversal indicators. There are many but less of them can guarantee high win rate. Because market is complex, the reversals can be nested together, which means sub level reversals will be contained in higher level waves. This can be well explained by Elloit wave theory.

Function

Here it is a simple moving average based swing reversal indicator as an example for many others to improve it. Although it simple, it could be very powerful to dedicated trading pairs in specific time frame. One can adjust N1~N4 as SMA peiords from short to long to customized this indicator or even by trying different moving average types to enhance its accuracy.

Key Signal

N1~N4 --> SMA look back periods
OB --> Overbought Threshold
OS --> Oversold Threshold


Pros and Cons

Simpe but powerful. More feedbacks are appreciated.

Remarks

Easy to be customized or integrated to your trading system.


Readme

In real life, I am a prolific inventor. I have successfully applied for more than 60 international and regional patents in the past 12 years. But in the past two years or so, I have tried to transfer my creativity to the development of trading strategies. Tradingview is the ideal platform for me. I am selecting and contributing some of the hundreds of scripts to publish in Tradingview community. Welcome everyone to interact with me to discuss these interesting pine scripts.

The scripts posted are categorized into 5 levels according to my efforts or manhours put into these works.

Level 1 : interesting script snippets or distinctive improvement from classic indicators or strategy. Level 1 scripts can usually appear in more complex indicators as a function module or element.

Level 2 : composite indicator/strategy. By selecting or combining several independent or dependent functions or sub indicators in proper way, the composite script exhibits a resonance phenomenon which can filter out noise or fake trading signal to enhance trading confidence level.

Level 3 : comprehensive indicator/strategy. They are simple trading systems based on my strategies. They are commonly containing several or all of entry signal, close signal, stop loss, take profit, re-entry, risk management, and position sizing techniques. Even some interesting fundamental and mass psychological aspects are incorporated.

Level 4 : script snippets or functions that do not disclose source code. Interesting element that can reveal market laws and work as raw material for indicators and strategies. If you find Level 1~2 scripts are helpful, Level 4 is a private version that took me far more efforts to develop.

Level 5 : indicator/strategy that do not disclose source code. private version of Level 3 script with my accumulated script processing skills or a large number of custom functions. I had a private function library built in past two years. Level 5 scripts use many of them to achieve private trading strategy.

18 Apr

Nota Keluaran

OVERVIEW
The [blackcat] L1 Swing Reversal Indicator is a powerful technical analysis tool designed to identify potential swing reversals in market trends. 📈 This indicator combines multiple Simple Moving Averages (SMAs) with advanced swing detection algorithms to provide traders with actionable signals for both bullish and bearish reversals.

FEATURES

• Multiple SMA-based trend analysis
• Advanced bottom swing detection using relative position calculation
• Sophisticated top swing detection with smoothed price differences
• Customizable threshold settings for overbought/oversold conditions
• Visual alerts with colored arrows for easy signal identification
• Integrated alert system for real-time notifications

HOW TO USE

Add the indicator to your chart

Customize the following parameters:
• SMA lengths: 5, 10, 20, and 60 periods
• Overbought threshold (default: 79)
• Oversold threshold (default: 80)

Monitor the chart for:
• Yellow arrows (↑) indicating potential bottom reversals
• Fuchsia arrows (↓) indicating potential top reversals
• SMA crossovers for additional confirmation

LIMITATIONS

• Works best on higher timeframes (4H+)
• Not recommended for extremely volatile markets
• Should be used in conjunction with other technical indicators for confirmation

NOTES

• The indicator uses advanced smoothing algorithms to reduce false signals
• Alert conditions are automatically generated for both bottom and top reversals
• Color-coded signals make it easy to identify potential trading opportunities