L1 Trend Reversal Indicator

21 de set. de 2020

Level: 1

Background
A trend reversal occurs when the direction of a stock (or a financial trading instrument) changes and moves back in the opposite direction. Uptrends that reverse into downtrends and downtrends that reverse into uptrends are examples of trend reversals.

Function

L1 Trend Reversal Indicator is simple but powerful. It can be used as a basic element for many complex trading system. Although L1 Trend Reversal Indicator can't hold a candle to moving averages in indicating trend reversals, it's good at showing the strength of a trend and trend cycles.

Key Signal

My favoriate trend reversal indicator with histograms

Pros and Cons

Pros:

*1. Simple but clear to see the trend reversals
*2. Use histogram to indicate sub-time-frame trend changes


Cons:

*1. No advanced trading skill is incorporated
*2. Need improvements on sideways.


Remarks

Just be simple but powerful

Readme

In real life, I am a prolific inventor. I have successfully applied for more than 60 international and regional patents in the past 12 years. But in the past two years or so, I have tried to transfer my creativity to the development of trading strategies. Tradingview is the ideal platform for me. I am selecting and contributing some of the hundreds of scripts to publish in Tradingview community. Welcome everyone to interact with me to discuss these interesting pine scripts.

The scripts posted are categorized into 5 levels according to my efforts or manhours put into these works.

Level 1 : interesting script snippets or distinctive improvement from classic indicators or strategy. Level 1 scripts can usually appear in more complex indicators as a function module or element.

Level 2 : composite indicator/strategy. By selecting or combining several independent or dependent functions or sub indicators in proper way, the composite script exhibits a resonance phenomenon which can filter out noise or fake trading signal to enhance trading confidence level.

Level 3 : comprehensive indicator/strategy. They are simple trading systems based on my strategies. They are commonly containing several or all of entry signal, close signal, stop loss, take profit, re-entry, risk management, and position sizing techniques. Even some interesting fundamental and mass psychological aspects are incorporated.

Level 4 : script snippets or functions that do not disclose source code. Interesting element that can reveal market laws and work as raw material for indicators and strategies. If you find Level 1~2 scripts are helpful, Level 4 is a private version that took me far more efforts to develop.

Level 5 : indicator/strategy that do not disclose source code. private version of Level 3 script with my accumulated script processing skills or a large number of custom functions. I had a private function library built in past two years. Level 5 scripts use many of them to achieve private trading strategy.

23 de mar.

Notas de Lançamento

OVERVIEW
A technical analysis tool designed to detect potential price trend reversals using exponentially smoothed range ratio calculations. Displays dual moving averages plotted alongside dynamically colored histograms to visualize trending momentum shifts.

FEATURES

Exponential Smoothing Algorithm: Custom-calculated averages reduce noise while maintaining responsiveness using cumulative sums and weighted factors
Dual Moving Averages: • White/Yellow "Fast/Slow" lines showing short-term vs long-term trend comparisons • Semi-transparent fill area between lines highlighting relative strength/difference
Color-Coded Visual Feedback: • Dynamic histogram columns shift between red/blue/green/yellow indicating acceleration/deceleration direction • Centerline difference plot reinforces directional movement patterns
Auto Signal Labels: Green upward/downward arrows appear when lines cross confirming buy/sell opportunities
HOW TO USE

Add indicator to chart with Insert_indicator button
Adjust period lengths via:
Fast Line Period: Controls sensitivity (default 8 bars)
Slow Line Period: Sets baseline comparison window (default 5 bars)
Interpret signals when: • Fast crosses above Slow → Bullish reversal (green arrow) • Fast crosses below Slow → Bearish reversal (red arrow)
LIMITATIONS

Results depend heavily on selected period values; extreme ranges may amplify/lag responses
Best paired with additional confirmatory indicators for robustness
Historical backtesting recommended due to price structure variability
NOTES

Developed for Pine Script v4+ compatibility
Calculation method blends traditional EMAs with proprietary normalization formula using 60-bar lookback windows