Two Bar Break Line Alerts R1.0

The Two Bar Break Line Alerts R1.0 indicator identifies short-term momentum entry points by tracking two or three-bar pullback breaks on price charts. It is optimized for binary options and Forex trading, providing visual breakout levels and directional arrows when specific price action conditions are met.

Usage

The tool is primarily used to identify trend continuation after a brief pullback. A bullish breakout is signaled when the high of a green candle exceeds the highest point of the previous two or three bear candles. Conversely, a bearish breakout occurs when the low of a red candle drops below the lowest point of the previous two or three bull candles.

Traders can use the following methods to refine signals:

• Binary Options: On 5-minute to daily charts, look for price to touch a breakout line. Wait for a pullback of 1-2 pips while the arrow remains active before taking an end-of-candle expiry trade.
• Forex Scalping: Use the default settings to catch quick momentum swings. For longer-term trades, adjust the MACD filter to catch broader trends.
• Filtering: Use the built-in Coloured MA, Slow Trend MA, or MACD filters to ensure signals align with the prevailing market direction.

Details

The script incorporates several price action concepts, including a variation of Daryl Guppy's Three Bar Count Back Line method when the three-bar setting is selected. It calculates pivot points based on consecutive candles of the opposite color and projects breakout levels as a horizontal channel.

A unique feature of this script is its integrated backtesting statistics for binary options. When enabled, it tracks performance metrics directly on the chart, highlighting successful bars in yellow and failed bars in black.

Settings

Strategy Configuration

• Use 2 or 3 Bar Break Line Strategy: Select between a 2-bar or 3-bar (Guppy method) lookback for breakout identification.
• Hide Pivot Point Symbols: Toggles the visibility of the triangle symbols marking pivot highs and lows.
• Hide Break Out Levels Channel: Toggles the horizontal step lines representing the breakout levels.
• Maximum Trigger Distance from Pivot: Limits how many bars can pass after a pivot before a breakout is considered invalid.

Moving Average Filters

• Use Coloured MA Filter: Enables a directional filter based on a customizable Moving Average.
• Coloured MA Type/Length: Select from 11 different MA types (HullMA, EMA, SMA, etc.) and set the period.
• Use Slow Trend MA Filter: Adds a secondary long-term filter (typically a 200-period MA).

MACD Filter

• Use MACD Filter: Filters signals based on MACD momentum.
• Use MACD Signal Line: Determines if the filter uses the Signal Line cross or the Zero Line as the threshold.
• MACD Fast/Slow/Signal Length: Standard MACD period adjustments.

Statistics & Alerts

• Show Bar Break Alert Arrows: Toggles the main breakout signal arrows.
• Show MA Direction Alert Arrows: Toggles arrows for trend direction changes.

FAQ

How do I interpret the binary option statistics on the title line?

The numbers represent (in order): %ITM rate, total orders, successful orders, failed orders, total candles tested, candles per day, trades per day, max consecutive wins, and max consecutive losses.

Can I use this for long-term Forex trading?

Yes, by increasing the lengths of the MA filters and the MACD settings, the indicator can be adapted to capture longer-term momentum swings rather than short-term pullbacks.

How do I access Two Bar Break Line Alerts R1.0?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.