Trend-Filtered Reversal

//@version=5
indicator("Trend-Filtered Reversal [FTM]", shorttitle="TF Reversal", overlay=false)

// ==========================================
// THEORY: Trend-Filtered Reversal System
// ==========================================
// Problem: In a strong uptrend, any pause or red candle with volume triggers a "Sell" (Fake Reversal).
// Solution: We must filter signals based on the Higher Timeframe (HTF) trend and baseline momentum.
// 
// Logic:
// 1. BASELINE TREND: Use a medium/long EMA (e.g., 50 or 200) to define the undeniable trend.
// 2. EXHAUSTION (Price): Price must be far away from the baseline (over-extended).
// 3. EXHAUSTION (Volume): High volume pushing into an extreme, followed by a momentum failure.
// 4. TREND FILTER: NEVER short a strong uptrend unless price is EXTREMELY overextended + strong rejection.

// ==========================================
// 1. INPUTS
// ==========================================
grp_trend = "Trend Baseline"
ema_len = input.int(50, "Baseline EMA Length", group=grp_trend)

grp_extremes = "Over-Extension (Bands)"
bb_len = input.int(20, "Bollinger Length", group=grp_extremes)
bb_mult = input.float(2.5, "Bollinger Multiplier (Strict)", group=grp_extremes, tooltip="Use 2.5 or 3.0 to only catch true extremes")

grp_vol = "Volume & Momentum"
vol_len = input.int(20, "Volume MA Length", group=grp_vol)
vol_surge = input.float(1.5, "Volume Surge Threshold", group=grp_vol)
rsi_len = input.int(14, "RSI Length", group=grp_vol)

// ==========================================
// 2. TREND & BASELINE ANALYSIS
// ==========================================
baseline = ta.ema(close, ema_len)

// Trend Direction
uptrend = close > baseline and ta.ema(close, 20) > baseline
downtrend = close < baseline and ta.ema(close, 20) < baseline

// Distance from Baseline (Percentage)
dist_pct = ((close - baseline) / baseline) * 100

// ==========================================
// 3. EXTREME BANDS (Strict BB)
// ==========================================
// We use a wider BB to ensure price is truly exhausted
basis = ta.sma(close, bb_len)
dev = ta.stdev(close, bb_len)
upper_bb = basis + dev * bb_mult
lower_bb = basis - dev * bb_mult

is_extreme_high = high >= upper_bb
is_extreme_low = low <= lower_bb

// ==========================================
// 4. VOLUME & MOMENTUM CONFIRMATION
// ==========================================
vol_ma = ta.sma(volume, vol_len)
is_high_vol = volume > vol_ma * vol_surge

rsi = ta.rsi(close, rsi_len)
is_overbought = rsi > 70
is_oversold = rsi < 30

// Price Rejection Anatomy
body = math.abs(close - open)
range_bar = high - low
upper_wick = high - math.max(close, open)
lower_wick = math.min(close, open) - low

// Strict Rejection: Wick must be large, and it must close against the push
bear_rejection = upper_wick > range_bar * 0.5 and close < open
bull_rejection = lower_wick > range_bar * 0.5 and close > open

// ==========================================
// 5. SIGNAL LOGIC (With Trend Filtering)
// ==========================================

// --- BEARISH REVERSAL (Sell) ---
// Condition 1: Must be at an extreme high (piercing upper band)
// Condition 2: Must have high volume (climax) OR be heavily overbought
// Condition 3: Must show price rejection
// THE FILTER: If in a strong uptrend, the distance from baseline must be significant (> 1.5%) to allow a counter-trend short.
bear_setup = is_extreme_high and (is_high_vol or is_overbought) and bear_rejection
bear_filtered = bear_setup and (not uptrend or (uptrend and dist_pct > 1.5))

// --- BULLISH REVERSAL (Buy) ---
// Condition 1: Must be at an extreme low (piercing lower band)
// Condition 2: Must have high volume (climax) OR be heavily oversold
// Condition 3: Must show price rejection
// THE FILTER: If in a strong downtrend, the distance from baseline must be significant (< -1.5%) to allow a counter-trend long.
bull_setup = is_extreme_low and (is_high_vol or is_oversold) and bull_rejection
bull_filtered = bull_setup and (not downtrend or (downtrend and dist_pct < -1.5))

// ==========================================
// 6. VISUALIZATION (Oscillator)
// ==========================================
// We plot the "Distance from Baseline" as the main oscillator, color-coded by trend

osc_color = uptrend ? color.new(color.teal, 30) : downtrend ? color.new(color.red, 30) : color.new(color.gray, 50)
plot(dist_pct, "Distance from EMA", color=osc_color, style=plot.style_area, linewidth=2)

// Zero Line (Baseline)
hline(0, "Baseline", color=color.white, linestyle=hline.style_solid)

// Volatility Bands on Oscillator
bb_width_pct = ((upper_bb - basis) / basis) * 100
plot(bb_width_pct, "Upper Ext", color=color.new(color.gray, 70), style=plot.style_line)
plot(-bb_width_pct, "Lower Ext", color=color.new(color.gray, 70), style=plot.style_line)

// ==========================================
// 7. SIGNAL MARKERS
// ==========================================
// Plot clear, filtered signals
plotshape(bull_filtered, "Bullish Reversal", shape.triangleup, location.bottom, color.lime, size=size.normal, text="BUY", textcolor=color.white)
plotshape(bear_filtered, "Bearish Reversal", shape.triangledown, location.top, color.red, size=size.normal, text="SELL", textcolor=color.white)

// Optional: Plot warning dots for setups that were blocked by the trend filter
plotshape(bear_setup and not bear_filtered, "Blocked Bear", shape.xcross, location.top, color=color.new(color.red, 70), size=size.tiny)
plotshape(bull_setup and not bull_filtered, "Blocked Bull", shape.xcross, location.bottom, color=color.new(color.green, 70), size=size.tiny)

// ==========================================
// 8. ALERTS
// ==========================================
alertcondition(bull_filtered, "Bullish Reversal", "Trend-Filtered Bullish Reversal Detected")
alertcondition(bear_filtered, "Bearish Reversal", "Trend-Filtered Bearish Reversal Detected")