Key Reversal pattern is similar to Engulfing price action pattern and consists of three bars. Two of them are trend-following and the third (key) one should absorb the previous (second) one.
The indicator implements a simplified pattern structure:
- Bullish Key Reversal - two bearish bars and one bullish bar (the third one). The third bar's Close price exceeds High of the previous (second) bar.
- Bearish Key Reversal - two bullish bars and one bearish bar (the third one). The third bar's Close price is lower than Low of the previous (second) bar.
There are five inputs:
Trend detection period - number of bars preceding the key one
Use trend detection filter - consider bars before the key one (Yes/No)
Show alerts (Yes/No)
Send mails - send signals to an email (Yes/No)
Send push-notifications - send push notifications to a mobile device (Yes/No)
If Use trend detection filter is disabled, the pattern applies the key bar only.