cristian.d

Reversal Candle Pattern SetUp



An outside reversal candle set up script with buy/sell signals. Looks simple but it's pretty powerful especially if combined with your choice confirming indicator.

The pattern psychology is this one (Frank Ochoa explanation): "The power behind this pattern lies in the psychology behind the traders involved in this setup. If you have ever participated in a breakout at support or resistance only to have the market reverse sharply against you, then you are familiar with the market dynamics of this setup.

[Basically, market participants are testing the waters above resistance or below support to make sure there is no new business to be done at these levels. When no initiative buyers or sellers participate in range extension, responsive participants have all the information they need to reverse price back toward a new area of perceived value.
As you look at a bullish outside reversal pattern, you will notice that the current bar's low is lower than the
prior bar's low. Essentially, the market is testing the waters below recently established lows to see if a downside
follow-through will occur. When no additional selling pressure enters the market, the result is a flood of buying
pressure that causes a springboard effect, thereby shooting price above the prior bar's highs and creating the
beginning of a bullish advance."
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//  Created by Cristian.D - from Secrets of a Pivot Boss - Frank Ochoa
study(title="OutsideReversal", shorttitle="OReversal", overlay=true)


// 
ReversalLong = low < low[1] and close > high[1]  and open <close[1]
ReversalShort = high > high[1] and close < low[1] and open >open[1]



// Bar Colors and signals
plotshape(ReversalLong,  title= "ReversalLong", location=location.belowbar, color=lime, style=shape.arrowup, text="BUY")
plotshape(ReversalShort,  title= "ReversalShort", location=location.abovebar, color=red, style=shape.arrowdown, text="SELL")

bgcolor(ReversalLong ==1 ? lime : ReversalShort==1 ? red : na, transp=70)
It's really good i got 10itm 1otm but i have a problem cause there is only sell signals on my chart
+5 Reply
sjcwealth batbayarbilguun3
@batbayarbilguun3 Well done! What is your time frame: 1 minute? 5 minutes? 15 minutes or 30 minutes?
+2 Reply
GHOP200 batbayarbilguun3
I have the same issue :(
Reply
RenzoLuna batbayarbilguun3
Guys, did u manage to solve the issue with the "buy" signalss ?? If u did, i would appreciate it if u tell me how to solve it.
Thanks in advance.
Reply
Thanks Cristian. Really good tool !! The only problem is I cannot see the "buy" signals just the "sell" ones. Are u aware of this ?
It seems I'm not the only one having this issue.
Looking forward to your kind response.
Reply
cristian.d RenzoLuna
Hmm, I never realized that cause I am looking at stocks and I have the buy signals...Are you guys trading Forex? For some reason, currencies don't show the buy signal, weird..I will see why is that..
Reply
Robbins2 cristian.d
Hello Cristian

Any updates?
Reply
wkanfield PRO cristian.d
@cristian.d,

For the Buy signal to appear for Forex you need to change the code from 'open < close to 'open <= close as there is no real open or close during the trading week. If you add the '+' sign to the equation, your Buy signals will appear.
Reply
cristian.d wkanfield
@wkanfield, exactly
Reply
cristian.d cristian.d
@cristian.d, for the BUY signals to show for Forex (since there are no gaps) do this : Click on the Pine Editor at the bottom of the chart, copy paste the below code, save it as whatever and add to chart


// Created by Cristian.D - from Secrets of a Pivot Boss - Frank Ochoa
study(title="OutsideReversal", shorttitle="OReversal", overlay=true)


//
ReversalLong = low < low and close > high and open <=close
ReversalShort = high > high and close < low and open >open



// Bar Colors and signals
plotshape(ReversalLong, title= "ReversalLong", location=location.belowbar, color=lime, style=shape.arrowup, text="BUY")
plotshape(ReversalShort, title= "ReversalShort", location=location.abovebar, color=red, style=shape.arrowdown, text="SELL")

bgcolor(ReversalLong ==1 ? lime : ReversalShort==1 ? red : na, transp=70)
+2 Reply
After that you can see the BUY signals
snapshot
Reply
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