CandelaCharts - Swing Failure Pattern (SFP)

3天前

📝 Overview

The Swing Failure Pattern (SFP) indicator is designed to identify and highlight Swing Failure Patterns on a user’s chart. This pattern typically emerges when significant market participants generate liquidity by driving price action to key levels. An SFP occurs when the price temporarily breaks above a resistance level or below a support level, only to quickly reverse and return within the previous range. These movements are often associated with stop-loss hunting or liquidity grabs, providing traders with potential opportunities to anticipate reversals or key market turning points.

• A Bullish SFP occurs when the price dips below a key support level, triggering stop-loss orders, but then swiftly reverses upward, signaling a potential upward trend or reversal.
  
• A Bearish SFP happens when the price spikes above a key resistance level, triggering stop-losses of short positions, but then quickly reverses downward, indicating a potential bearish trend or reversal.
  

The indicator is a powerful tool for traders, helping to identify liquidity grabs and potential reversal points in real-time. By marking bullish and bearish Swing Failure Patterns on the chart, it provides clear visual cues for spotting market traps set by major players, enabling more informed trading decisions and improved risk management.

📦 Features

• Bullish/Bearish SFPs
  
• Styling
  

⚙️ Settings

• Length: Determines the detection length of each SFP
  
• Bullish SFP: Displays the bullish SFPs
  
• Bearish SFP: Displays the bearish SFPs
  
• Label: Controls the labels size
  

⚡️ Showcase

Bullish

Bearish

Both


📒 Usage

The best approach is to combine a few complementary indicators to gain a clearer market perspective. This doesn’t mean relying on the Golden Cross, RSI divergences, SFPs, and funding rates simultaneously, but rather focusing on one or two that align well in a given scenario.



The example above demonstrates the confluence of a Bearish Swing Failure Pattern (SFP) with an RSI divergence. This combination strengthens the signal, as the Bearish SFP indicates a potential reversal after a liquidity grab, while the RSI divergence confirms weakening momentum at the key level. Together, these indicators provide a more robust setup for identifying potential market reversals with greater confidence.

🚨 Alerts

This script provides alert options for all signals.

Bearish Signal

A bearish signal is triggered when a Bearish SFP is formed.

Bullish Signal

A bullish signal is triggered when a Bullish SFP is formed.

⚠️ Disclaimer

Trading involves significant risk, and many participants may incur losses. The content on this site is not intended as financial advice and should not be interpreted as such. Decisions to buy, sell, hold, or trade securities, commodities, or other financial instruments carry inherent risks and are best made with guidance from qualified financial professionals. Past performance is not indicative of future results.