[TTI] Reversion Alert on Nasdaq

📜 ––––HISTORY & CREDITS 🏦
This script, titled " Reversion Alert", was developed by TinTinTrading with the intention of creating an easy visual tool based on the relationship between the price and different Exponential Moving Averages (EMAs). It is something TinTinTrading has learned over the years from studying the Investor's Business Daily courses and materials, especially seminars held by William O'Neil.

🎯 ––––WHAT IT DOES 💡
The " Reversion Alert" script monitors the distance between the closing price and the 9-period EMA as well as the distance between the 9-period and 20-period EMAs. It generates an alert when the closing price is far enough away from the 9-period EMA relative to the distance between the two EMAs. The sensitivity of this alert can be adjusted by the user. The script also plots the 9-period and 20-period EMAs on the chart for visual reference. When the distance between the closing price and the 9-period EMA is more than the distance between the 9 and 20 period EMAs (and meets several other coded conditions), the price is likely extended and we can anticipate a pullback within next 1-3 days on the chart.

IMPORTANT - I only use this indicator on the NASDAQ Composite ( IXIC ) and S&P500 ( SPX ) and Dow Jones Composite ( DJI ). If you decide to use it for individual assets (equities, crypto or forex) make sure you toggle the sensitivity input so that it makes sense for the asset you are trading.

🛠️ ––––HOW TO USE IT 🔧
After adding the script to your chart, you will see two lines representing the 9-period and 20-period EMAs. You can adjust the sensitivity of the alert using the 'Sensitivity (%)' input in the settings panel. The default sensitivity is set at 18.5%. When an alert condition is met, a downward pointing red triangle with an exclamation mark will appear above the bar. This indicates a potential reversion scenario based on the relative positioning of the closing price and the two EMAs.
If the indicator shows an exclamation mark above the chart we can anticipate a pullback. Some techniques that yuo could apply could be:
👉 Tighten stops
👉 Reduce position size
👉 Harvest profits (or scale down)
👉 Be cautious to add new positions

Remember that this tool is meant to aid in your analysis and not to dictate trades. Always use in conjunction with other tools and your own analysis.