IndicatorPro

Reversal Points

Identifies potential reversal points by combining multiple factors: structure, momentum divergence, extreme extensions, and volume climax. Only signals when multiple factors align for higher probability reversals.

Reversal Divergence Price Action

Full Source Code

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What's Included

Multi-factor reversal detection

Confluence scoring system

Structure-based reversals

Momentum divergence check

Volume climax detection

Alert on high-probability setups

How Reversal Points works

Reversal points aim to solve a common problem: single reversal signals fire far too often and most fail. Instead of flagging a turn on any one cue, this concept only highlights a potential reversal when several independent confluence factors line up at the same location, so you are looking at agreement between different types of evidence rather than one noisy trigger.

The factors typically considered together include a shift or exhaustion in market structure, momentum divergence where price and an oscillator disagree, signs of overextension where price has stretched far from its mean, and a volume climax suggesting a final flush or blow-off. When these coincide, the case for a turn is far stronger than any factor alone.

Because not every reversal is equal, the alignment is scored for quality: the more factors that agree and the cleaner they are, the higher the confidence attached to the flag. This gives a tiered view rather than a binary one, letting you weight stronger confluence more heavily while still treating even the best score as a probability, not a promise.

When to use it

Looking for higher-quality turning points where several independent signals converge instead of one.
Filtering out isolated reversal cues that would otherwise generate constant, low-value alerts.
Prioritising setups by confluence score so stronger alignments get more attention and size consideration.
Adding an objective checklist to counter-trend or exhaustion trades that are inherently risky.

When it's not the right tool

In a strong, sustained trend, where reversal signals repeatedly appear early and get run over.
As a licence to pick tops and bottoms without confirmation, since even high scores can fail.
When only one or two weak factors align, which does not meet the confluence the concept relies on.

Source Code Preview

Get the full PineScript v6 source code—use it as a foundation and build on top of it with HorizonAI.

1//@version=6

2indicator("Reversal Points", overlay=true)

3// ─────────────────────────────────────

4// Reversal Points - Full Source Code

5// ─────────────────────────────────────

7// Input Settings

8pivotLen = input.int(5, "Pivot Length")

9showLabels = input.bool(true, "Show Labels")

11// Core Logic

12pivotHigh = ta.pivothigh(high, pivotLen, pivotLen)

13pivotLow = ta.pivotlow(low, pivotLen, pivotLen)

15// Structure Detection

16var float lastHigh = na

17var float lastLow = na

19if not na(pivotHigh)

20 lastHigh := pivotHigh

21 // ... more logic

23// Break of Structure

24bosUp = close > lastHigh

200+ lines of source code

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Frequently asked questions

Why require multiple factors instead of one reversal signal?

Any single reversal cue fires frequently and fails often. Requiring several independent factors to agree at the same spot raises the bar, filters out most of the noise, and produces fewer but generally higher-quality reversal candidates.

What does the confluence score represent?

It reflects how many factors align and how clean they are, giving a graded sense of confidence rather than a yes/no flag. A higher score means stronger agreement, but it is still a probability estimate and never a guarantee that price will turn.

Can I trade reversals against a strong trend using this?

Counter-trend trading is inherently risky, and even strong confluence can be overrun in a powerful trend. Use tight invalidation, wait for confirmation, and treat the flag as one input among many. Nothing here is financial advice.