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Swing Failure pattern

A Swing Failure Pattern occurs when the price attempts to break a significant high or low but fails to sustain above or below that level. This pattern often results in a reversal as liquidity is grabbed and the price moves in the opposite direction.

Swing Failure Patterns

KEY FEATURES

SFP types

Bullish and Bearish SFP Detection – Spots fakeouts above highs (bearish) and below lows (bullish), where price quickly reverses after taking liquidity.

Bullish SFP
Bearish SFP

Traders can use SFPs to identify potential entry points for trend reversals or liquidity-based trades.

Deviation Area

Deviation areas highlight significant price levels where the price deviates or extends beyond normal ranges, typically measured as a percentage of a reference point, such as a recent swing high or low.

Deviation Area

These areas, marked by specific percentage levels like 200%, 250%, or 400%, indicate potential zones where the price might either reverse or show a continuation of momentum.

Traders use deviation areas to set targets, identify overextension, and anticipate reactions at these levels for planning entries or exits.

CUSTOMIZATION

Settings

Settings

  1. Enable SFP:

  2. Activates or deactivates the SFP feature. When enabled, it displays SFP patterns on the chart.

  3. Show Last:

    • Defines how many recent SFPs are displayed on the chart. For instance, setting it to 5 will show the last 5 occurrences.

  4. Sensitivity:

    • Adjusts the responsiveness of the SFP detection in a trend following filter mode. Higher sensitivity identifies more pronounced moves, while lower sensitivity focuses on more subtle swings.

  5. Length:

    • Sets the number of bars considered to determine swing highs or lows. A higher value identifies more significant swings over a longer range.

  6. Filtering:

    • Selects the filtering method for SFP detection:

      • Trend Filter: Only detects SFPs in alignment with the prevailing trend.

      • All Patterns: Detects all SFPs regardless of trend direction.

  7. Threshold:

    • Sets the volume threshold for identifying a valid SFP. For instance, a threshold of 1 indicates. The higher threshold the bigger SFP will be detected.

  8. Text Size:

    • Adjusts the size of the SFP labels on the chart for better visibility:

      • Small, Medium, Large.

  9. Deviation Area:

    • Displays zones indicating potential price overextension levels based on the SFP. Settings include:

      • Level: Displays deviation levels like 200%, 250%, etc.

      • Fill: Adds shading to the deviation zones for enhanced visibility.

These customization options allow traders to fine-tune SFP detection to suit their trading style and strategy, providing precise identification of liquidity-driven market reversals.

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