Smarter Money Concepts - Wyckoff Springs & Upthrusts [PhenLabs]

📊Smarter Money Concepts - Wyckoff Springs & Upthrusts [PhenLabs]
Version: PineScript™v6

📌Description
Discover institutional manipulation in real-time with this advanced Wyckoff indicator that detects Springs (accumulation phases) and Upthrusts (distribution phases). It identifies when price tests support or resistance on high volume, followed by a strong recovery, signaling potential reversals where smart money accumulates or distributes positions. This tool solves the common problem of missing these subtle phase transitions, helping traders anticipate trend changes and avoid traps in volatile markets.

By combining volume spike detection, ATR-normalized recovery strength, and a sigmoid probability model, it filters out weak signals and highlights only high-confidence setups. Whether you’re swing trading or day trading, this indicator provides clear visual cues to align with institutional flows, improving entry timing and risk management.

🚀Points of Innovation

• Sigmoid-based probability threshold for signal filtering, ensuring only statistically significant Wyckoff patterns trigger alerts
  
• ATR-normalized recovery measurement that adapts to market volatility, unlike static recovery checks in traditional indicators
  
• Customizable volume spike multiplier to distinguish institutional volume from retail noise
  
• Integrated dashboard legend with position and size options for personalized chart visualization
  
• Hidden probability plots for advanced users to analyze underlying math without chart clutter
  

🔧Core Components

• Support/Resistance Calculator: Scans a user-defined lookback period to establish dynamic levels for Spring and Upthrust detection
  
• Volume Spike Detector: Compares current volume to a 10-period SMA, multiplied by a configurable factor to identify significant surges
  
• Recovery Strength Analyzer: Uses ATR to measure price recovery after breaks, normalizing for different market conditions
  
• Probability Model: Applies sigmoid function to combine volume and recovery data, generating a confidence score for each potential signal
  

🔥Key Features

• Spring Detection: Spots accumulation when price dips below support but recovers strongly, helping traders enter longs at potential bottoms
  
• Upthrust Detection: Identifies distribution when price spikes above resistance but falls back, alerting to possible short opportunities at tops
  
• Customizable Inputs: Adjust lookback, volume multiplier, ATR period, and probability threshold to match your trading style and market
  
• Visual Signals: Clear + (green) and - (red) labels on charts for instant recognition of accumulation and distribution phases
  
• Alert System: Triggers notifications for signals and probability thresholds, keeping you informed without constant monitoring
  

🎨Visualization

• Spring Signal: Green upward label (+) below the bar, indicating strong recovery after support break for accumulation
  
• Upthrust Signal: Red downward label (-) above the bar, showing failed breakout above resistance for distribution
  
• Dashboard Legend: Customizable table explaining signals, positioned anywhere on the chart for quick reference
  

📖Usage Guidelines
Core Settings

• Support/Resistance Lookback
  Default: 20
  Range: 5-50
  Description: Sets bars back for S/R levels; lower for recent sensitivity, higher for stable long-term zones – ideal for spotting Wyckoff phases
  
• Volume Spike Multiplier
  Default: 1.5
  Range: 1.0-3.0
  Description: Multiplies 10-period volume SMA; higher values filter to significant spikes, confirming institutional involvement in patterns
  
• ATR for Recovery Measurement
  Default: 5
  Range: 2-20
  Description: ATR period for recovery strength; shorter for volatile markets, longer for smoother analysis of post-break recoveries
  
• Phase Transition Probability Threshold
  Default: 0.9
  Range: 0.5-0.99
  Description: Minimum sigmoid probability for signals; higher for strict filtering, ensuring only high-confidence Wyckoff setups
  

Display Settings

• Dashboard Position
  Default: Top Right
  Range: Various positions
  Description: Places legend table on chart; choose based on layout to avoid overlapping price action
  
• Dashboard Text Size
  Default: Normal
  Range: Auto to Huge
  Description: Adjusts legend text; larger for visibility, smaller for minimal space use
  

✅Best Use Cases

• Swing Trading: Identify Springs for long entries in downtrends turning to accumulation
  
• Day Trading: Catch Upthrusts for short scalps during intraday distribution at resistance
  
• Trend Reversal Confirmation: Use in conjunction with other indicators to validate phase shifts in ranging markets
  
• Volatility Plays: Spot signals in high-volume environments like news events for quick reversals
  

⚠️Limitations

• May produce false signals in low-volume or sideways markets where volume spikes are unreliable
  
• Depends on historical data, so performance varies in unprecedented market conditions or gaps
  
• Probability model is statistical, not predictive, and cannot account for external factors like news
  

💡What Makes This Unique

• Probability-Driven Filtering: Sigmoid model combines multiple factors for superior signal quality over basic Wyckoff detectors
  
• Adaptive Recovery: ATR normalization ensures reliability across assets and timeframes, unlike fixed-threshold tools
  
• User-Centric Design: Tooltips, customizable dashboard, and alerts make it accessible yet powerful for all trader levels
  

🔬How It Works

Calculate S/R Levels:

• Uses the highest high and the lowest low over the lookback period to set dynamic zones
  
• Establishes baseline for detecting breaks in Wyckoff patterns
  

Detect Breaks and Recovery:

• Checks for price breaking support/resistance, then recovering on volume
  
• Measures recovery strength via ATR for volatility adjustment
  

Apply Probability Model:

• Combines volume spike and recovery into a sigmoid function for confidence score
  
• Triggers signal only if above threshold, plotting visuals and alerts
  

💡Note:
For optimal results, combine with price action analysis and test settings on historical charts. Remember, Wyckoff patterns are most effective in trending markets – use lower probability thresholds for practice, then increase for live trading to focus on high-quality setups.