Smart Reversal [Scalping-Algo]

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Smart Reversal [Scalping-Algo]

This indicator identifies potential reversal points using a two-step confirmation method that I developed for my own scalping. Unlike typical reversal indicators that rely on RSI oversold/overbought or simple candlestick patterns, this uses a different approach.

🔹 HOW IT WORKS

The logic is based on two phases:

Phase 1 - Anchor Detection:
The indicator looks for candles where price closes beyond ALL previous candles in the lookback period. For a bullish setup, the close must be below the lows of the last N candles (default 20). This isn't just a "lower low" - it's an extreme extension where price has broken below every single candle in the range. I also require this candle to have above-average volume (2x the 20-period average) to confirm real selling pressure, not just a gap or low-liquidity move.

Phase 2 - Confirmation:
After an anchor forms, I wait for price to reverse and close above the anchor candle's high (for buys) or below the anchor's low (for sells). This must happen within 3 bars. If price makes a new extreme instead, the setup cancels.

🔹 SIGNAL QUALITY SCORING



Each signal gets a score from 3/5 to 5/5:
- 3/5: Basic confirmation occurred
- 4/5: Anchor or confirmation had strong volume
- 5/5: Both volume conditions met + aligned with 200 EMA trend

I focus on 4/5 and 5/5 signals personally.

🔹 WHAT YOU SEE ON CHART

- Green/Red boxes: Active setup waiting for confirmation
- B or S labels: Confirmed signals with quality score
- Dashboard: Shows current status and volume condition

🔹 SETTINGS

- Bars to Check: How many candles for the breakout comparison (default 20)
- Confirmation Window: Bars allowed after anchor for confirmation (default 3)
- Volume thresholds: Adjustable multipliers for anchor (2x) and confirmation (1.2x)

🔹 SUGGESTED USE

- Works on any timeframe, but I use it mainly on 5-15 min charts
- Better results when combined with key support/resistance levels
- Avoid trading during high-impact news



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