📈 Trading Indicator v3 — Research-Enhanced Reversal Signals

Pine Script v6 indicator for TradingView that detects high-probability reversal entries using a weighted scoring system with 10+ confirmation layers, informed by quantitative finance research.

Quick Start

Open TradingView Pine Editor
Copy the contents of indicator_v3.pine
Paste and click "Add to Chart"

v3 Improvements over v2

#	Improvement	What it fixes	Research basis
1	Weighted Scoring	Divergence & liquidity sweep = 2 pts; pattern = 1 pt	QTMRL 2025: composite scores outperform equal-weight ensembles
2	Bullish Divergence Detection	Weak buys: divergence between price (lower low) and RSI/MACD (higher low) now adds a bonus	RSI+SMA combos only predictive with trend direction
3	Liquidity Sweep Detector	Stop-run/breaker pattern: price sweeps below swing low, reclaims with volume spike = +2	TradeFM 2025 / DeepLOB: orderbook pressure precedes visible reversal
4	Dynamic Regime Filter	False SELLs in chop: if ATR% < threshold, SELL signals are suppressed; BUY requires divergence or sweep	QTMRL 2025: 30–50% of false signals eliminated by regime gating
5	Stricter SELL Filter	SELL now requires both H4 AND Daily HTF bearish alignment	Multi-timeframe NN Trading 2025: daily trend constrains hourly reversals
6	Dynamic RSI Zones	RSI oversold/overbought bands expand in high-volatility regimes, tighten in low-vol	Sentiment-Aware Portfolio 2025
7	VWAP Proximity Scoring	Price near VWAP = mean-reversion zone; reclaim above VWAP in downtrend = +1	VWAP execution benchmarks: equilibrium-as-support
8	Swing High/Low Levels	`ta.pivothigh` / `pivotlow` for dynamic S/R in divergence & sweep detection	Market microstructure: stops cluster at swing extremes
9	Chop Background Coloring	Visual regime indicator: gray = choppy, green/red = trending	—
10	Independent Cooldowns	Buy and sell cooldowns are tracked separately	Reduces signal clustering on forced-direction bars

Signal Types

🟢 BUY signals — Bullish reversal in confirmed downtrend with confluence
🔴 SELL signals — Bearish reversal in confirmed uptrend with strict HTF alignment

Confirmation Layers (Weighted Scoring)

Layer	Points	Condition
Pattern	1	Candlestick reversal detected
Volume	1	Volume > 1.3× 20-period average
RSI	1	RSI < dynamic oversold (buy) or > dynamic overbought (sell)
MACD	1	Histogram inflecting in signal direction
ADX/DMI	1	ADX > 22 + DI alignment confirms trend
HTF Bias	1	Price aligned with daily EMA(50)
R:R Gate	1	Risk:Reward ≥ 1.5:1 (ATR-based)
VWAP	1	Proximity to VWAP (mean-reversion zone)
Divergence	2	Regular bullish divergence: price ↓, RSI/MACD ↑
Liquidity Sweep	2	Stop-run reclaim with volume spike

BUY fires when score ≥ Min Confirmations (default: 5/15).
SELL fires when score ≥ Min Confirmations AND both H4 + Daily HTF bearish.

Candlestick Patterns Detected

Bullish	Bearish
Hammer 🔨	Shooting Star 💫
Inverted Hammer	Hanging Man ☠
Bullish Engulfing 🔄	Bearish Engulfing 🔄
Piercing Line 📌	Dark Cloud Cover ☁
Morning Star ⭐	Evening Star ⭐
Dragonfly Doji 🐉	Gravestone Doji 🪦
Doji (in downtrend) ✚	Doji (in uptrend) ✚

Extra Visual Overlays (v3)

VWAP (aqua line) — dynamic mean-reversion S/R
Divergence markers (green triangles) — pre-signal warnings
Liquidity sweep diamonds (blue diamonds) — stop-run events
Regime background (gray = choppy, tinted = trending)
Expanded info table — RSI, ADX, MACD, Volume, Trend, HTF Bias, ATR%, Regime, VWAP Proximity

Risk Management

ATR-based dynamic Stop-Loss and Take-Profit levels plotted on each signal
Minimum R:R ratio gate prevents bad setups

Alert Conditions

BUY Signal (v3) — multi-confirmation with divergence/sweep
SELL Signal (v3) — strict HTF-aligned bearish reversal
Any Signal (v3) — either direction

License

MIT

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