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Co-authored-by: Claude Opus 4.5 <noreply@anthropic.com> Co-authored-by: aider (openrouter/anthropic/claude-sonnet-4) <aider@aider.chat> Co-authored-by: Warp <agent@warp.dev>
76 lines
4.1 KiB
Markdown
76 lines
4.1 KiB
Markdown
# Reversals
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> "Pivot point is hypothesis, not prophecy. Mathematics identifies levels where crowd psychology may shift. Market decides whether to respect calculation or ignore it entirely."
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Tools indicating potential reversals, support/resistance, or pivot points. These indicators identify price levels where trend exhaustion or continuation decisions occur.
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## Implementation Status
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| Indicator | Full Name | Status | Description |
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| :--- | :--- | :---: | :--- |
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| FRACTALS | Williams Fractals | 📋 | Five-bar pattern identifying local peaks/troughs; marks support/resistance levels. |
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| PIVOT | Pivot Points (Classic) | 📋 | Standard floor trader pivots with 7 levels (PP, R1-R3, S1-S3). |
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| PIVOTCAM | Camarilla Pivot Points | 📋 | Mean-reversion pivots with 9 levels; R3/S3 are key reversal zones. |
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| PIVOTDEM | DeMark Pivot Points | 📋 | Minimalist trend-following pivots with only 3 levels and conditional logic. |
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| PIVOTEXT | Extended Traditional Pivots | 📋 | Extended pivots with 11 levels (R1-R5, S1-S5) for volatile markets. |
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| PIVOTFIB | Fibonacci Pivot Points | 📋 | Fibonacci-ratio based pivots; Golden Ratio (61.8%) at R2/S2. |
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| PIVOTWOOD | Woodie's Pivot Points | 📋 | Weighted close pivots (2× close weight) for intraday trading. |
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| PSAR | Parabolic Stop And Reverse | 📋 | Trailing stop indicator that accelerates with trend; provides entry/exit signals via SAR dots. |
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| SWINGS | Swing High/Low Detection | 📋 | Identifies significant price reversals and swing points using configurable lookback. |
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## Selection Guide
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**For intraday trading:** Classic PIVOT provides baseline levels. PIVOTWOOD emphasizes closing price for day-session context. PIVOTCAM targets mean-reversion at R3/S3 zones.
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**For swing trading:** PIVOTFIB uses Fibonacci ratios aligned with retracement analysis. PIVOTEXT provides extended levels for multi-day moves. FRACTALS marks structural highs/lows.
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**For trend-following:** PSAR provides trailing stop with acceleration. PIVOTDEM uses conditional logic based on prior bar relationship. SWINGS identifies trend reversal points.
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**For volatile markets:** PIVOTEXT with 11 levels captures extreme moves. PIVOTCAM's outer levels (R4/S4) act as volatility breakout zones.
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## Pivot Point Comparison
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| System | Levels | Formula Basis | Trading Style |
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| :--- | :---: | :--- | :--- |
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| Classic | 7 | (H+L+C)/3 | General purpose |
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| Woodie | 7 | (H+L+2C)/4 | Intraday, close-weighted |
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| Camarilla | 9 | Range × multipliers | Mean-reversion |
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| DeMark | 3 | Conditional on O/C relationship | Trend-following |
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| Fibonacci | 7 | PP ± (H-L) × Fib ratios | Retracement alignment |
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| Extended | 11 | Classic + outer levels | High volatility |
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## Pivot Level Calculations
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| Level | Classic | Woodie | Camarilla |
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| :--- | :--- | :--- | :--- |
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| R4 | — | — | C + (H-L) × 1.5/2 |
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| R3 | 2×PP - 2×L | — | C + (H-L) × 1.25/4 |
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| R2 | PP + (H-L) | PP + (H-L) | C + (H-L) × 1.1/6 |
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| R1 | 2×PP - L | 2×PP - L | C + (H-L) × 1.1/12 |
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| PP | (H+L+C)/3 | (H+L+2C)/4 | — |
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| S1 | 2×PP - H | 2×PP - H | C - (H-L) × 1.1/12 |
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| S2 | PP - (H-L) | PP - (H-L) | C - (H-L) × 1.1/6 |
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| S3 | 2×PP - 2×H | — | C - (H-L) × 1.25/4 |
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| S4 | — | — | C - (H-L) × 1.5/2 |
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## Reversal Pattern Types
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| Pattern | Indicator | Bars Required | Signal Type |
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| :--- | :--- | :---: | :--- |
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| Williams Fractal Up | FRACTALS | 5 | Resistance marked at middle high |
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| Williams Fractal Down | FRACTALS | 5 | Support marked at middle low |
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| Swing High | SWINGS | Configurable | Local maximum confirmation |
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| Swing Low | SWINGS | Configurable | Local minimum confirmation |
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| SAR Flip | PSAR | 1 | Trend reversal signal |
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## PSAR Mechanics
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Parabolic SAR uses acceleration factor that increases with each new extreme:
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| Parameter | Default | Range | Effect |
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| :--- | :---: | :--- | :--- |
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| Initial AF | 0.02 | 0.01-0.05 | Starting sensitivity |
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| AF Step | 0.02 | 0.01-0.05 | Acceleration rate |
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| Max AF | 0.20 | 0.10-0.30 | Maximum sensitivity |
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Higher AF values create tighter stops (more whipsaws, earlier exits). Lower AF values create wider stops (fewer signals, later exits). |