Tested Levels Indicator for Repeated Wick Rejections

Summary

This indicator identifies potential horizontal levels at the midpoint of a candle’s upper or lower shadow. It scans a configurable number of prior bars for repeated tests where price reaches the level but closes without crossing it. Once the requested number of tests is found, it draws a line from the first qualifying test to the current bar; upper-shadow levels are shown in green and lower-shadow levels in red.

The method uses separate conditions for upper and lower levels and stops its scan when a prior close has crossed the candidate level. The lookback length and required test count are configurable, while a calculation limit can reduce drawing workload. The source advises keeping the lookback practical because the indicator may run slowly. It describes how the indicator draws levels, but gives no trading rules for entries or exits, no performance results, and no evidence that repeated wick rejections predict future price behavior.

Key ideas

• Candidate levels are set at the midpoints of the current candle’s upper and lower shadows.
• The indicator searches prior bars for a configurable number of tests that fail to close through a level.
• It draws upper and lower levels in different colors from the first qualifying test onward.
• The scan and calculation limits affect its workload, and the document reports no predictive or performance validation.

Tags

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