Scoring Reversals After Price Acceptance Outside a Value Band

Summary

The indicator looks for price to remain beyond a dynamic band around an exponential-average anchor, then return inside it. It treats that failed acceptance as a possible reversal setup and combines acceptance duration with the close-back distance, candle direction and shape, volume relative to its baseline, invalidation distance, and room toward a target. These inputs feed separate bullish and bearish readiness scores, failure-risk estimates, and a structured plan with trigger, invalidation, and target references.

The script also defines sensitivity and confirmation modes, states such as watch, reversal ready, invalidated, and target review, plus alerts for status changes. Its own description emphasizes that these are warnings and a decision aid, not trade orders. The displayed scores depend on hand-set thresholds and weights; the excerpt supplies no backtest, calibration method, or evidence that the scores predict profitable reversals. It is a rules-based chart tool, and its settings and behavior would need independent evaluation in the intended market and timeframe.

Key ideas

• The tool identifies potential reversals after price spends time outside a dynamic value band and closes back inside it.
• Its readiness scores combine acceptance duration, reversal candle characteristics, volume, target room, and invalidation risk.
• The script provides trigger, invalidation, and target references alongside watch and setup states.
• Sensitivity and confirmation settings change the thresholds used to qualify a reversal.
• Alerts are warnings rather than trade instructions, and the document provides no performance validation.

Tags

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