- 6 different moving averages
- Averages of moving averages
- Keltner channels
- Pin bar patterns
- Engulfment patterns
The indicator is designed as an oscillator and treats positive values as a signal for an impending reversal and negative points for an impending reversal.
At the moment it includes 46 different conditions to calculate the overall index. The 46 conditions flow into 15 signal lines which are summarized to the overall reversal index.
This indicator is not just a simple line with a couple of peaks.
It’s designed to interactively work with it. It's got tons of tweaking options in the settings section.
Examples of usage:
- Use it for primary reversal detection
- Use it for reversal confirmation
- Use it for candle stick pattern detection
- Use alert levels to increase/decrease the number of reversal detections
- Detect crossings
- Detect Moving Average crossings on different levels
- Detect indecisive areas of sideway chopping
Examples of conditions:
- is there a crossing of the MACD?
- are there multiple crossings?
- are there any significant crossings of moving averages?
- is the market chopping sideways?
- are there any reversal relevant candle stick patterns?
- did these patterns appear inside or outside the channels?
- are these patterns confirmed by the subsequent candle?
- was there a crossing of the %K and %D line of the stochastics in the last periods?
- is or was the in the overbought or oversold zone?
Instead of watching 10 different signal lines of indicators and candle stick patterns simultaneously I wanted to have one indicator which aggregates all (or at least a lot of) the relevant information.
So the idea was to create an index and assign a specific amount of points to specific attributes or situations (e.g crossed or candle stick pattern occurred and was confirmed by the subsequent candle and was outside the ).
After gathering all the information (or points) everything is boiled down to one index.
Notice: there is no holy grail in TA!