OPEN-SOURCE SCRIPT
Ineficient market
The setup
The 1-2-3 pattern (price-structure reversal, in the Joe Ross / Zeiierman lineage) marks three alternating pivots: an extreme, a pullback, and a second extreme that fails to exceed the first — a Higher-Low for longs, a Lower-High for shorts. Entry fires on confirmation of the 3rd pivot (no waiting for a breakout, which cuts lag). On top of that sits a volatility gate: signals only trigger when relative volatility is compressed (ATR% ≤ its own moving average). Trades resolve on a small fixed TP, a wide SL, and a time-stop.
The inefficiency
This isn't about "predicting direction" — direction is free and doesn't pay. The edge is a short-term overreaction at structure pivots: after price prints a failed extreme, it tends to give back a small, fast fraction of the move. In compressed volatility that give-back is more reliable and less noisy. The edge is statistical and regime-conditional — not a silver bullet.
Why the exit looks "wrong" (and why that's the whole point)
The counterintuitive part: small TP + wide SL + no trailing, no break-even, no touching the trade. We tested active management extensively (move to BE, trailing, tight stops at the "normal MAE") and every version destroys the edge — because 1–3% adverse excursion is normal even on winners, and any tight stop sits exactly where noise wanders. Holding through that swing is what captures the reversion. It's fire-and-forget by design, not by laziness.
How we found it (the differentiator)
This wasn't reverse-engineered from a pretty chart. It survived:
- Random-matched placebo — the same exit engine fired on random bars vs. the real signal, proving the edge lives in the signal, not the short TP.
- Path-dependent backtesting — simulating the exact order of intra-trade events, not aggregate stats (which mislead).
- Conditional MAE analysis — measuring how win probability decays as a trade digs, which set the wide SL and killed the temptation of tight stops.
Inputs: prd (pivot lookback) · ATR ratio max (volatility gate) · TP % · SL % · time-stop · direction (long/short).
Disclaimer: For research/education, not financial advice. Past performance does not guarantee future results. The edge is conditional on regime and costs — test with your own commission/slippage before any live use.
Script de código abierto
Fiel al espíritu de TradingView, el creador de este script lo ha convertido en código abierto, para que los traders puedan revisar y verificar su funcionalidad. ¡Enhorabuena al autor! Aunque puede utilizarlo de forma gratuita, recuerde que cualquier republicación del código está sujeta a nuestras Normas internas.
Exención de responsabilidad
La información y las publicaciones no constituyen, ni deben considerarse como, asesoramiento o recomendaciones financieras, de inversión, de trading u otro tipo, proporcionadas o respaldadas por TradingView. Obtenga más información en Condiciones de uso.
Script de código abierto
Fiel al espíritu de TradingView, el creador de este script lo ha convertido en código abierto, para que los traders puedan revisar y verificar su funcionalidad. ¡Enhorabuena al autor! Aunque puede utilizarlo de forma gratuita, recuerde que cualquier republicación del código está sujeta a nuestras Normas internas.
Exención de responsabilidad
La información y las publicaciones no constituyen, ni deben considerarse como, asesoramiento o recomendaciones financieras, de inversión, de trading u otro tipo, proporcionadas o respaldadas por TradingView. Obtenga más información en Condiciones de uso.