Three drives top setup event
Marks a possible top: the third push to the recent high after two dips, before any break lower.
A small state machine walks the closing price through five steps. A close within 0.3% of the highest close of the last 100 bars counts as a push to the high. A close at least 0.4% below that high, or within 0.4% of the 100-bar lowest close, counts as a dip. It needs push, dip, push, dip, push, then fires on the third push and stays there. It marks a three-pushes top forming, not a sell.
How to read it
- Markers sit on the candles where the third push reaches the high, so read each one as the end of a three-step rise.
- Before a marker, look for two earlier pushes that each came back within 0.3% of the same high, with a visible dip between them.
- The marker does not wait for price to break lower, so the top is not confirmed yet.
- A given chart shows at most one marker: the first completed sequence from the start of its data.
What it outputs
- Third push
- Marks the candle where a third close reaches near the 100-bar high after two dips. Fires once per chart.
When it fires
The bar where a third close lands near the 100-bar high after two dips. It fires once per chart and then stays silent. The moment marks a possible top; the indicator does not require a close below the 100-bar low.
Settings
- eps
- How close to the 100-bar high a close must be to count as a push (0.003 is 0.3%). Raising it to 0.01 accepts closes up to 1% below the high, so pushes come sooner. At 0 only a close exactly at the high counts. Below 0 it never fires.
- pullback
- How far below the 100-bar high a close must fall to count as a dip (0.004 is 0.4%). Lowering it to 0.002 accepts shallower dips, the main way to loosen it. Raising it also lets a close near the 100-bar low count, so it is not simply stricter.
Pitfalls
- It fires at most once per chart. The machine never leaves its final state, so later three-push tops are ignored. On SPY one-minute bars for September 2026 it fired once in the whole month.
- The lines come from closing prices over 100 bars, not highs and lows, despite the Donchian name. Intraday wicks never count.
- Rare at default settings: one event in a month of SPY one-minute bars, about 0.05 a day. A quiet chart is normal; loosen the settings before deciding it is broken.