This ProBuilder script is designed to identify potential trend reversals by analyzing patterns where a bullish bar closes above two preceding bearish bars and vice versa. The code uses loops, conditional statements, and logical operators to determine the trading signals.

DEFPARAM CalculateOnLastBars = 1000
Bullish = close > open
Bearish = close < open

//
// DOWN trend detection
//
Count1 = 0
i = 0
WHILE Count1 < 2 AND i < BarIndex
    i = i + 1
    IF Count1 = 0 THEN
        IF Bullish[i] THEN
            Count1 = 1
            MyLO1 = low[i]
        ENDIF
    ELSE
        IF Bullish[i] THEN
            Count2 = 2
            MyLO2 = low[i]
            d1 = MyLO1 > MyLO2
            MyLO2 = min(MyLO1,MyLO2)
            Break
        ENDIF
    ENDIF
WEND
d2 = Bearish
d3 = close < MyLO2
Dcond = d1 AND d2 AND d3

//
// UP trend detection
//
Count2 = 0
j = 0
WHILE Count2 < 2 AND j < BarIndex
    j = j + 1
    IF Count2 = 0 THEN
        IF Bearish[j] THEN
            Count2 = 1
            MyHI1 = high[j]
        ENDIF
    ELSE
        IF Bearish[j] THEN
            Count2 = 2
            MyHI2 = high[j]
            u1 = MyHI1 < MyHI2
            MyHI2 = max(MyHI1,MyHI2)
            Break
        ENDIF
    ENDIF
WEND
u2 = Bullish
u3 = close > MyHI2
Ucond = u1 AND u2 AND u3

// Cond = 0
IF Ucond THEN
    Cond = 1
ELSIF Dcond THEN
    Cond = -1
ENDIF

RETURN Cond AS "Signal"

The code snippet above is structured into two main parts: detecting a downward trend reversal and an upward trend reversal. Here’s a breakdown of how each part works:

• Initialization: Sets the number of bars to calculate and defines bullish and bearish conditions based on the closing and opening prices.
• Downward Trend Detection: Uses a WHILE loop to find two consecutive bullish bars where the second bar’s low is lower than the first. This suggests a potential bearish reversal if followed by a bearish bar closing below the lowest of these two bullish bars.
• Upward Trend Detection: Similarly, another WHILE loop searches for two consecutive bearish bars where the second bar’s high is higher than the first, indicating a potential bullish reversal if followed by a bullish bar closing above the highest of these bearish bars.
• Signal Output: The script outputs a signal (1 for bullish reversal, -1 for bearish reversal, and 0 otherwise) based on the conditions met in the loops.

This approach helps in identifying key reversal points, which are crucial for making informed trading decisions in various market conditions.