Breakout and Breakdown Indicator with Retests

The Breakout and Breakdown Indicator with Retests tool identifies key intraday support and resistance levels from the market open to signal high-probability trend continuations after a confirmed retest.

Usage

The Breakout and Breakdown Indicator with Retests is primarily used by day traders and scalpers to trade the opening range. It automatically calculates the high and low of the first five minutes of the trading session (09:30 - 09:35 AM). These levels act as dynamic support and resistance lines for the remainder of the day.

Signals are generated based on a specific logic:

• Breakout: Occurs when the price moves above the opening high, returns to retest it (or moves back below it), and then successfully closes above that high again.
• Breakdown: Occurs when the price moves below the opening low, returns to retest it (or moves back above it), and then successfully closes below that low again.

Traders can use the green diamond markers to identify bullish entries and red diamond markers for bearish entries. The script is optimized for the 1-minute and 5-minute timeframes.

Details

This indicator focuses on the "Opening Range" concept but adds a validation layer through retest detection. Many breakout strategies suffer from "fakeouts" where the price briefly crosses a level only to reverse. By requiring the price to deviate from the level and then return to break it again, the script aims to filter out noise and capture genuine momentum shifts. The levels are established strictly between 09:30 AM and 09:35 AM and persist as horizontal step-lines across the chart.

Settings

• Breakout Marker Color: Sets the color of the diamond and label for bullish breakout signals.
• Breakdown Marker Color: Sets the color of the diamond and label for bearish breakdown signals.
• Highest Price Line Color: Adjusts the color of the horizontal line representing the opening range high.
• Lowest Price Line Color: Adjusts the color of the horizontal line representing the opening range low.

FAQ

How do I use the Breakout and Breakdown Indicator with Retests?

The indicator plots the high and low of the first 5 minutes of trading. Wait for a diamond marker to appear, which indicates the price has retested and then successfully broken through the opening range levels.

What timeframes are best for this tool?

This tool is specifically designed for low-timeframe trading, with the best results typically found on the 1-minute and 5-minute charts.

Where can I access this indicator?

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