Innotrade Price Action Reversal Entry Candles

Innotrade Price Action Reversal Entry Candles

This indicator is designed to help traders identify high-probability reversal entry points. It combines a classic two-candle reversal pattern with an intelligent moving average confirmation filter to increase the likelihood of successful trades and reduce false signals.

The "Innotrade PA Reversal Entry Candles" indicator not only visualizes potential turning points but also qualifies them by highlighting only the strongest setups with a clear "L" (Long) or "S" (Short) signal.

Key Features

Dynamic Two-Candle Reversal Detection:

Setup Candle: The first candle initiating a potential reversal is subtly colored (e.g., light green after a red candle).

Entry Candle: The second, confirming candle of the pattern is marked with a more prominent color to clearly visualize the potential entry point.

Intelligent MA Trend Filter & Entry Confirmation: This is the core of the indicator. It filters reversal signals based on their quality:

Long Signal (L): An "L" appears below a bullish entry candle only if it closes above both moving averages (EMA & SMA). This signals a strong long entry confirmed by the uptrend.

Short Signal (S): An "S" appears above a bearish entry candle only if it closes below both moving averages. This signals a strong short entry confirmed by the downtrend.

Integrated Moving Averages:

An Exponential Moving Average (EMA) and a Simple Moving Average (SMA) are included directly in the indicator (default length 50).

The lines are automatically labeled on the last bar, so you always know which line is which.

Comprehensive Customization: Fully adapt the indicator to your personal trading style.

Strategy and Application

Look for High-Quality Signals: The strongest signals are the colored entry candles that also display an "L" or "S" label.

Long Entries: An "L" below a bright green candle signals a high probability of an upward move, as the reversal pattern is confirmed by the prevailing trend (price above the MAs).

Short Entries: An "S" above a bright red candle signals a high probability of a downward move, as the bearish pattern is confirmed by the downtrend.

Weaker Signals: Colored entry candles that do not receive an "L" or "S" label suggest a counter-trend setup. These should be traded with increased caution and may require additional confirmation.

Context: Use the EMA and SMA lines as general indicators for the current market sentiment and as dynamic support or resistance zones.

Customization Options

You can configure nearly everything in the settings menu:

Toggle Signals On/Off: Independently enable or disable the reversal coloring and the "L/S" labels.

Customize Colors: Change the colors for setup, entry, and text elements.

Adjust L/S Label Size: Choose from five different sizes (from tiny to huge) to optimize the display.

Modify Moving Averages: Change the period length of the EMA and SMA or hide them completely.

Disclaimer

This indicator is for informational and educational purposes only and does not constitute financial advice. Always make trading decisions based on comprehensive analysis and solid risk management. Backtesting and paper trading are strongly recommended before deploying any strategy with real capital.