Clean ADX with bidirectional Breakout Volume

The Clean ADX with bidirectional Breakout Volume indicator is a comprehensive trend analysis tool that combines long-term trend strength detection with volume-based breakout identification.

Usage

The indicator consists of two primary components displayed in a separate pane: the Clean ADX lines and the Bidirectional Breakout Volume columns.

• Clean ADX: Uses a long-term lookback period to determine trend strength and potential direction. A rising positive value suggests bullish strength, while a falling negative value suggests bearish strength.
• Breakout Volume: Identifies significant shifts in volume relative to price action. When the current volume direction exceeds the highest or lowest volume seen over a specific period, the indicator plots green or red columns and triangle shapes.
  • Bullish Breakout: Occurs when volume is positive, RSI is below 50 (suggesting recovery room), and volume exceeds the previous n-period high.
  • Bearish Breakdown: Occurs when volume is negative, RSI is above 50 (suggesting exhaustion room), and volume exceeds the previous n-period low.

Details

The "Clean" aspect of the ADX is achieved using a Super Smoother filter implementation, which helps reduce lag and noise typically found in standard directional movement calculations. The indicator calculates the rate of change of highest and lowest prices over a user-defined lookback period and applies a second-order Butterworth filter to the results.

The volume component uses "bidirectional" logic, assigning a positive or negative sign to volume based on price close relative to the previous bar. By comparing this signed volume against a rolling window of previous volume peaks and troughs, the tool highlights anomalies that often precede or confirm price breakouts.

Settings

Clean ADX Settings

• Lookback Period for Clean ADX: Defines the window used to calculate the highest highs and lowest lows for trend determination. Higher values result in a smoother, more long-term trend view.
• Source for Clean ADX: The price source used for the calculation (default is HLC3).

Bidirectional Breakout Volume Settings

• Display Breakout Volume: Toggles the visibility of the volume columns and breakout shapes on the chart.
• Breakout Volume Length: The lookback period used to determine the "volume high" or "volume low" threshold for breakout identification.

FAQ

How do I use the breakout signals?

Breakout signals appear as triangles and colored columns. A green triangle suggests a potential bullish entry point when volume confirms an upward shift, while a red triangle suggests a bearish entry point.

What is the advantage of the Clean ADX over the standard ADX?

The Clean ADX is designed to provide a smoother representation of trend strength by utilizing advanced filtering techniques, making it less susceptible to the "choppiness" often seen in standard directional movement indicators.

How can I access Clean ADX with bidirectional Breakout Volume?

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