@unlcesyp smart wick reversal

@unlcesyp smart wick reversal

This indicator helps you spot potential market reversals by highlighting abnormal wicks that often signal a turning point. It adapts to changing market volatility and volume, making it more reliable across different market conditions.

How It Works

1. Wick Analysis
- Measures upper and lower wicks over a chosen lookback period.
- Calculates the average and standard deviation of these wicks, then flags “abnormally long” wicks.

2. Adaptive Volatility
- Uses an ATR-based volatility factor to adjust the wick threshold.
- In high-volatility conditions, the threshold is higher, reducing false signals.

3. Trend Check
- Select either an SMA or EMA to determine if the market is in an uptrend or downtrend.
- A large upper wick in an uptrend can signal bullish exhaustion (potential reversal down).
- A large lower wick in a downtrend can signal bearish exhaustion (potential reversal up).

4. Optional Volume Confirmation
- Checks if volume is above its average to ensure strong participation in the move.
- Helps filter out weak, low-volume signals.

5. Signals
- Red ▼ (triangle down) = Potential Bearish Reversal
- Green ▲ (triangle up) = Potential Bullish Reversal

Why Use It?

- Adaptive: Automatically adjusts to changes in market volatility.
- Flexible Trend Basis: Choose SMA or EMA for calculating market trend.
- Volume Filter: Adds an extra layer of confirmation.
- Clear Visuals: Marks potential reversals with simple, unobtrusive shapes.

Inputs Explained

1. Lookback Period for Wick Analysis (`length`)
- Default: 20
- Number of bars used to calculate wick averages. Higher values = smoother signals; lower values = more reactive.

2. ATR Length for Volatility Filtering (`atr_length`)
- Default: 14
- Number of bars the ATR uses to gauge volatility.

3. Base Threshold Multiplier (`base_multiplier`)
- Default: 2.0
- Multiplier for standard deviation of wicks. Higher = fewer (but potentially stronger) signals.

4. Volatility Sensitivity Factor (`volatility_sensitivity`)
- Default: 1.5
- Adjusts how much volatility affects the threshold. Higher = more adaptive; lower = more stable.

5. Enable Volume Confirmation (`volume_filter`)
- Default: true
- When enabled, signals only appear if volume exceeds its average by a specified multiplier.

6. Volume Spike Multiplier (`vol_multiplier`)
- Default: 1.5
- Determines how much above average volume must be to confirm a signal.

7. Trend Calculation Method (`trendMethod`)
- Options: “SMA” or “EMA”
- Determines the type of moving average to evaluate the market trend for exhaustion signals.

Best Practices

- Combine with other price action or technical indicators to confirm signals.
- Use on multiple timeframes for a broader market perspective.
- Adjust parameters (`length`, `atr_length`, `base_multiplier`) for different assets or personal preference.