Detecting V Bottoms and V Tops with Deviation Pivots

Summary

This open-source chart strategy seeks V-shaped bottoms and tops using deviation pivots. A pivot is updated when price moves far enough from the previous pivot, subject to a minimum bar depth. The script tracks recent high and low pivots and their midpoint, then evaluates candidate patterns using candle body size, breakout levels, and confirmation rules. Users can choose among confirmation at the first break, midpoint, opposite pivot, or no confirmation, and set a maximum number of bars for confirmation. These controls aim to distinguish a sharp reversal from an unconfirmed pivot move.

The excerpt identifies the pivot and signal inputs but ends partway through the breakout logic, so it does not show the complete entry, exit, or risk management rules. It supplies no backtest results, test market, or evidence that the pattern predicts profitable reversals. Deviation pivots may only become clear after subsequent price movement, so apparent historical turning points can be delayed or revised; confirmation requirements can add further delay. Performance would need evaluation with realistic execution and costs.

Key ideas

• Deviation and depth settings govern when the script recognizes a new pivot.
• The strategy tracks recent pivot highs, lows, and their midpoint to frame potential V patterns.
• Confirmation can depend on a first break, midpoint, opposite pivot, or be disabled.
• Candle body measures and a maximum confirmation window help qualify candidate breakouts.
• The available source excerpt omits the complete trading rules and provides no performance evidence.

Tags

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