OPEN-SOURCE SCRIPT
SKDJ Bottom-Top Reversal Indicator
SKDJ Bottom-Top Reversal Indicator — Introduction (English Version)
The SKDJ Bottom-Top Reversal Indicator is an enhanced version of the classic Stochastic (K/D) oscillator.
It is designed to identify high-probability reversal zones, highlight momentum shifts, and help traders capture oversold bounces and overbought pullbacks with greater clarity.
This indicator smooths the standard RSV calculation with double EMA/MMA layers, producing a more stable K/D structure while maintaining sensitivity to short-term price swings. It plots dynamic green/red lines for visual clarity and provides automatic buy/sell markers based on extreme-zone crossovers.
🔍 Core Logic
1. RSV Calculation
RSV measures the close price relative to the highest and lowest prices within a lookback window:RSV=EMA((Close−Lowest(N))/(Highest(N)−Lowest(N))×100,M)
This normalizes the price position into a 0–100 range and applies smoothing to reduce noise.
2. K & D Lines
K Line = EMA of RSV
D Line = SMA of K
The combination produces a fast and slow stochastic pair that tracks short-term momentum shifts.
3. Reversal Signals
The indicator automatically highlights:
Buy Signal (Bottom Reversal):
When K < 25 and K crosses above D → potential oversold rebound.
Sell Signal (Top Reversal):
When K > 75 and D crosses above K → potential overbought correction.
These signals combine extreme price positioning + momentum crossover, giving higher-quality reversal points.
🎨 Visual Features
Green K-line for upward momentum
Red D-line for trend strength
Overbought (80) & Oversold (20) horizontal guides
Automatic triangle markers for buy/sell signals
Optional background color shading
This clean visual design allows traders to read momentum more intuitively and react quicker to turning points.
🧩 Use Cases
The SKDJ indicator is ideal for:
Identifying short-term mean-reversion opportunities
Spotting early momentum reversal before large swings
Filtering entries inside range-bound markets
Confirming signals from other systems (MA, trendlines, volume)
It works on all timeframes and across stocks, crypto, forex, commodities.
📈 Why It Works
This indicator combines:
Price location (overbought/oversold range)
Momentum direction (K/D crossover)
Smoothed oscillation (less noise, cleaner signals)
The convergence of these three factors often precedes short-term market turning points.
The SKDJ Bottom-Top Reversal Indicator is an enhanced version of the classic Stochastic (K/D) oscillator.
It is designed to identify high-probability reversal zones, highlight momentum shifts, and help traders capture oversold bounces and overbought pullbacks with greater clarity.
This indicator smooths the standard RSV calculation with double EMA/MMA layers, producing a more stable K/D structure while maintaining sensitivity to short-term price swings. It plots dynamic green/red lines for visual clarity and provides automatic buy/sell markers based on extreme-zone crossovers.
🔍 Core Logic
1. RSV Calculation
RSV measures the close price relative to the highest and lowest prices within a lookback window:RSV=EMA((Close−Lowest(N))/(Highest(N)−Lowest(N))×100,M)
This normalizes the price position into a 0–100 range and applies smoothing to reduce noise.
2. K & D Lines
K Line = EMA of RSV
D Line = SMA of K
The combination produces a fast and slow stochastic pair that tracks short-term momentum shifts.
3. Reversal Signals
The indicator automatically highlights:
Buy Signal (Bottom Reversal):
When K < 25 and K crosses above D → potential oversold rebound.
Sell Signal (Top Reversal):
When K > 75 and D crosses above K → potential overbought correction.
These signals combine extreme price positioning + momentum crossover, giving higher-quality reversal points.
🎨 Visual Features
Green K-line for upward momentum
Red D-line for trend strength
Overbought (80) & Oversold (20) horizontal guides
Automatic triangle markers for buy/sell signals
Optional background color shading
This clean visual design allows traders to read momentum more intuitively and react quicker to turning points.
🧩 Use Cases
The SKDJ indicator is ideal for:
Identifying short-term mean-reversion opportunities
Spotting early momentum reversal before large swings
Filtering entries inside range-bound markets
Confirming signals from other systems (MA, trendlines, volume)
It works on all timeframes and across stocks, crypto, forex, commodities.
📈 Why It Works
This indicator combines:
Price location (overbought/oversold range)
Momentum direction (K/D crossover)
Smoothed oscillation (less noise, cleaner signals)
The convergence of these three factors often precedes short-term market turning points.
Script de código aberto
Em verdadeiro espírito do TradingView, o criador deste script o tornou de código aberto, para que os traders possam revisar e verificar sua funcionalidade. Parabéns ao autor! Embora você possa usá-lo gratuitamente, lembre-se de que a republicação do código está sujeita às nossas Regras da Casa.
Aviso legal
As informações e publicações não se destinam a ser, e não constituem, conselhos ou recomendações financeiras, de investimento, comerciais ou de outro tipo fornecidos ou endossados pela TradingView. Leia mais nos Termos de Uso.
Script de código aberto
Em verdadeiro espírito do TradingView, o criador deste script o tornou de código aberto, para que os traders possam revisar e verificar sua funcionalidade. Parabéns ao autor! Embora você possa usá-lo gratuitamente, lembre-se de que a republicação do código está sujeita às nossas Regras da Casa.
Aviso legal
As informações e publicações não se destinam a ser, e não constituem, conselhos ou recomendações financeiras, de investimento, comerciais ou de outro tipo fornecidos ou endossados pela TradingView. Leia mais nos Termos de Uso.