Volume Breakout

The Volume Breakout indicator provides a unique perspective on volume dynamics by quantifying the extent of volume breakouts in relation to a Simple Moving Average (SMA) to help traders identify high-interest market moves.

Usage

The indicator is primarily used to identify periods where trading activity significantly exceeds the historical average. By calculating the Relative Volume (current volume divided by the SMA), it assigns a multiplier to each bar.

• Breakout Identification: A value of 2.0 indicates that the current volume is twice the average. Traders can use this to confirm price breakouts, as high relative volume often suggests strong institutional participation.
• Visual Analysis: The columns are color-coded based on the strength of the volume. Darker colors typically represent high-volume breakouts, while lighter shades represent mild activity.
• Labels: The indicator can plot the multiplier directly above the volume bars, allowing for quick numerical assessments without needing to check a separate scale.
• Dashboard: A built-in dashboard provides additional context such as the Average True Range Percentage (ATRP) and sector information to help filter opportunities based on volatility and market segment.

Details

The script calculates the Relative Volume by dividing the current bar's volume by the SMA of volume from the previous bar. This ensures that the current volume is being compared against a established baseline.

The indicator includes a "Smart" display mode for labels, which filters out noise by only showing labels when the volume exceeds a specific user-defined threshold. It also features logic to detect "Confirmed Volume Breakouts," which occur when high relative volume is accompanied by a significant price move (greater than 2%).

Settings

🎨 Volume Color Settings

• Enable Custom Color Scheme: Toggles the specialized color logic for breakouts.
• Normal Volume: The color used when volume is below the mild threshold.
• Mild/High Volume Thresholds: Numerical multipliers that define what constitutes "Mild" or "High" relative volume activity.
• Bullish/Bearish Colors: Specific colors for high and mild volume spikes depending on the candle direction.

📊 Volume Analysis Settings

• Show Volume Labels: Toggles the numerical relative volume display on the chart.
• Label Display Mode: Choose between showing all labels, only significant ones (Smart), or only high-volume breakouts (Minimal).
• Volume SMA Period: Sets the lookback period for the baseline volume average.

⚡ Dashboard Settings

• Show Sector Information/ATRP: Toggles the visibility of specific data points on the dashboard.
• Dashboard Position: Controls where the information table is anchored on the chart.
• Dashboard on Price Chart: When enabled, moves the dashboard from the indicator pane to the main price pane.

FAQ

How do I interpret a relative volume value of 1.5?

A value of 1.5 means the current volume is 50% higher than the average volume over the specified SMA period.

Can I set alerts for volume spikes?

Yes, the script includes alert conditions for High Volume Breakouts, Mild Activity, and Volume Spikes that can be configured through the TradingView Alerts menu.

How do I access Volume Breakout?

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