4h First Candle Reversion (5m Exec) vc1.3 [@theadventuredan]

4h First Candle Reversion – Indicator (5m Execution)
A precision intraday scalping tool based on the New York daily opening range

This indicator implements a powerful and simple intraday scalping concept popularized in professional trading circles and recently explained in a well-known podcast. It uses the first fully closed 4-hour candle of the trading day (typically based on New York time) to define a daily range — and then generates high-probability reversion signals when price fakes out above or below that range.

How It Works
1. The Daily 4-Hour Range (The “Opening Range”)
At the start of each session day (by default: 00:00 → 04:00 New York time), the indicator builds a range using:
• Range High = highest price of that 4h window
• Range Low = lowest price of that 4h window
Once the 4-hour window ends and the candle has fully closed, the box becomes fixed for the remainder of the day.
The box can be displayed:
• Only for the current day (clean mode), or
• For all past days (historical mode)
________________________________________
2. The Reversion Setup
This indicator does not trade breakouts.
It identifies failed breakouts / fakeouts using a strict two-candle confirmation:
Short Reversion
A short signal is generated when:
1. A 5-minute candle closes above the Range High
2. The very next candle closes back inside the range
→ This indicates a failed breakout to the upside.
Long Reversion
A long signal is generated when:
1. A 5-minute candle closes below the Range Low
2. The next candle closes back inside the range
→ This indicates a failed breakdown to the downside.
Only the close of the candle is considered — wicks alone do not trigger signals.
________________________________________
3. Why This Setup Works
This method is built around the idea that the first 4 hours of the session define the market’s opening structure:
• Many early breakouts during the day fail and revert.
• Liquidity is often engineered around the opening range boundaries.
• Fading these failed breakouts with a clear structure provides favorable risk/reward.
The reversion pattern frequently produces:
• Tight, logical stop-loss levels (the outside candle’s high/low)
• High-quality 2R+ opportunities
• 1–2 strong signals per day, on average
________________________________________
4. Features Included in This Indicator
✔ Automatic session timezone detection (NY by default)
✔ Integer-based timezone selector (avoids Pine Script issues)
✔ Highlighting of the first 4-hour build window
✔ Display of the daily range box
✔ Optional mode to show only the latest box
✔ Clear visual LONG/SHORT triangles on valid reversion setups
✔ Works best on 5-minute charts (as designed)
✔ Clean, efficient logic for both live trading and backtesting (strategy version coming soon)
________________________________________
How To Use It
1. Set Session TZ = America/New_York (recommended)
2. Keep Block Start = 0 and Block Length = 4
3. Trade on a 5m chart
4. Watch for:
o Price closes outside the 4h range
o Next candle closes back inside
o LONG or SHORT marker appears
These markers reflect the exact textbook reversion setup.
________________________________________
Future Version (Strategy)
A full strategy version with:
• Automatic long/short entries
• Stop Loss at breakout extreme
• 2R Take Profit
• Optional ATR-based SL
• Full backtest statistics
…will be released as the next update.