Reversal Indicator

What does this indicator do?
This indicator is designed to help traders spot potential reversal points in the market by combining multiple conditions:

1. ✅ Multi-Timeframe RSI – Checks RSI on a lower timeframe (like 5m) to see if the market is oversold or overbought.
   
2. ✅ Higher Timeframe SMA Filter – Uses a higher timeframe SMA (like 1h) as a trend filter, so signals only trigger in the direction of the bigger trend.
   
3. ✅ Candle Pattern Confirmation – Looks for bullish or bearish engulfing candles to confirm price exhaustion before signaling a reversal.
   

When all these conditions align, the indicator plots a triangle under/above the candle to highlight a possible reversal.

Why is this useful?
Many traders struggle with false RSI signals or candle patterns that fail because they don’t respect the larger trend.
This indicator filters out weak setups by requiring alignment between:

A lower timeframe RSI oversold/overbought condition,

A higher timeframe trend filter (SMA),

And a strong candle reversal pattern.

This multi-layer approach helps avoid chasing every RSI dip and focuses only on high-probability reversal zones.

How does it work?
Bullish reversal signal → appears when RSI on the lower TF is oversold, price is still above the higher TF SMA (trend still intact), AND a bullish engulfing candle forms.

Bearish reversal signal → appears when RSI on the lower TF is overbought, price is below the higher TF SMA, AND a bearish engulfing candle forms.

When all conditions match, the indicator plots a triangle under the candle for bullish signals and above the candle for bearish signals.

How to use it?
Choose your timeframes:

• A timeframe for trend filtering (e.g. 1h).
  
• A timeframe for RSI (e.g. 4h).
  

NOTICE: THE RSI TIMEFRAME SHOULD BE GREATER THEN THE TIMEFRAME FOR THE SMA
Otherwise it will not generate that much signals.


Watch for signals ONLY in the direction of the higher trend.

Use the signals as potential reversal points, not as guaranteed entries. Combine with your own confluence.

Optionally set alerts for bullish or bearish reversal conditions so you never miss a setup.

Customization
✅ Choose your RSI length & overbought/oversold levels.
✅ Select which timeframes you want for SMA & RSI.
✅ Toggle the higher TF SMA display on/off.
✅ Adjust signal appearance (triangles).

Important Notes
⚠️ This is not a standalone trading system. It’s a tool to help spot possible reversal areas. Always confirm with price action, support/resistance, or your own strategy