Detecting 2B Reversals with Pivot Points and False Breakouts

Summary

This document explains a chart indicator based on the 2B reversal idea: a price pushes beyond a prior support or resistance area, then fails to sustain the move, creating a possible reversal signal. The indicator first locates swing highs and lows over a configurable bar period. When price crosses a pivot, it records a subsequent reference level; a later cross back through that level within a minimum and maximum bar window confirms the setup. It marks the signal with a segment and an arrow, placing the annotation using average true range.

The write-up gives the detection logic and example settings for pivot period and confirmation window, but supplies no market data, performance results, or comparison against other methods. Signals should therefore be treated as pattern definitions rather than evidence of predictive profitability. Results may depend on timeframe, parameter choices, and how pivots are confirmed; the document does not discuss transaction costs or false-signal rates.

Key ideas

• The method looks for failed moves beyond prior support or resistance as possible reversal setups.
• Pivot highs and lows are identified using a configurable lookback period.
• A reversal is confirmed when price crosses a later reference level within a specified bar window.
• Average true range is used to position chart annotations.
• The document provides no backtest or evidence that the signals are profitable.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.