Summary: The goal is not to be right every time, it’s to be right at least one time.
This tutorial goes over the mechanics of how the Reversal Warning System works and most importantly the why behind it.
1) Volume Spikes: Golden Candle overlay was made to help predict volume spikes on the 2-3 minute time frame. It doesn’t predict it 100% of the time, but enough to have a slight edge.
2) Support & Resistance: Just a time saver, wanted to automate drawing S/R levels so I didn’t have to spend hours on multiple time frames drawing lines on the chart.
3) Bull & Bear Divergences: Having 5-10 Oscillators on the chart made it hard to actually see the price action. I just wanted to clean up my chart and be oscillator free. Divs are marked by Diamonds now and I don’t have to guess if it truly was a Divergence or not.
4) Confluence: S/R alone had a less than 50% win rate and divergences had less than a 50% win rate. By mixing them both together, it increased the probability to over 50%.
5) .5 FIB Zone: Or the 50% entrancement. Yes, I was getting even lazier and did not want to pull a FIB tool to see where the half way mark between the swing high & the swing low was. So t was added in just as a reference point for me.
Conclusion: Now that I got me out of the way, I want to make this better for everyone else. Please use the “Reversal Warning System” indicator and give me recommendations to make it better. I want to make this work for all styles of traders.
I ask for your patience since I do work full time & most of my day is programing for work, sometimes I come home and just do not want to see another text editor. Thank you for your support!
Hope this helps people =)