This indicator is meant to be used as a reversal detector. I personally would rather enter a position at the beginning of a trend than catch the last couple of moves. This indicator does a good job of alerting when price may reverse by identifying high probability price action patterns. 

Bear in mind that these patterns are only reliable after filtering. Filtering is the meat of this indicator. 

Even though this indicator is capable of filtering a high percentage of weak signals, I still like to have additional confirmation in the form of support/resistance or structure breaks.

I wait for reversal bars to appear, using this indicator, and then wait for market structure to break using a trendline breakout advisor.

You can pick one up for free here:  or a paid one here:  

These are the three patterns that can be filtered using RSI, moving average, and pattern specific filters.  

• Kangaroo Tails 

• Engulfing Bars

• Three Bar Pattern

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I have also thrown in triple inside bars as a bonus. I do not filter this pattern because the direction could go either way. The pattern simply means that volatility has decreased and a large move in either direction is likely. Often you will see expansion in both directions before the larger move occurs. 

I have also supplied specific filters dedicated to kangaroo tails because it has been one of the most reliable/popular patterns when used with structure breaks. 

In the latest version, I have incorporated specific engulfing filters to eliminate even more weak signals much like what I was trying to accomplish with kangaroo filters.

I do not recommend using this indicator stand-alone. Rather, you could combine it with an indicator that identifies market structure breaks for the strongest confirmation and highest probability.

For me, I see the pattern, and I become alert. I see the structure break, and I gain confidence. 

Go ahead and give the demo version a spin and play with the settings because there are many to choose from. You may also find this indicator works better with certain pairs such as GBP pairs. 

Features included:

• Set different RSI values for each pattern to minimize weak signals

• Set push, email, or pop-up alerts for each pattern

• Option to use a MA in the RSI calculation for greater filtering flexibility

• Option to use trend filters that are based on price being above or below a moving average 

• Set whether kangaroo tails should have a greater range than the prior two bars

• Set kangaroo tail room to the left from 0-20 bars

• Option to filter kangaroo tails that are doji-like and set doji sensitivity

• Change relative body size of kangaroo tails for additional filtering

• Apply spread forgiveness in pips to engulfing bars in the event that a bar opens higher(bullish) or lower(bearish) than the close of the prior bar due to spread

• Set a minimum body range of engulfing bars in relation to ATR

• Set an engulfing bar as an outside bar or choose exactly what part of the bar closes/opens outside of the prior bar 

• Fully customizable color template 

• Adjust arrow sizes 

• Adjust arrow positions

• Choose which patterns to show 

• Customizable RSI period

• Customizable RSI price type 

• Set max bars for indicator history

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