Wedge Polaris

The Wedge Polaris indicator is a multi-pattern auto-detector that identifies five distinct converging-channel pattern families to project high-probability breakout targets. It utilizes adaptive collinearity and volatility-scaled slope analysis to classify market structures and provides a comprehensive visual suite for tracking pattern evolution and breakout success.

Usage

The Usage section describes how the script can be used to identify structural trading opportunities. The indicator automatically draws channel boundaries when a valid pattern is detected and removes or "ghosts" them once a breakout occurs or the pattern expires.

• Pattern Identification: The tool classifies price action into five categories: Ascending Triangle, Descending Triangle, Symmetric Wedge, Rising Wedge, and Falling Wedge. Each is distinguished by unique line styles (solid for triangles, dashed for wedges).
• Breakout Execution: When price closes outside the channel boundaries, the script initiates a "breakout" state. A strong breakout is visually flagged with a background flash if the candle body size significantly exceeds the recent average volatility (Z-score > 3).
• Target Management: Upon a confirmed breakout, a three-target ladder is projected. Traders often use Target 1 (T1) for partial profit taking and move stops to breakeven, while aiming for T2 or the Fibonacci-extended T3 for maximum reward.
• Sentiment Analysis: Use the right-side bias gauge and breakout probability labels to assess whether a bullish or bearish expansion is statistically more likely based on the pattern's internal volume and historical duration.

Details

The script operates through a multi-stage execution pipeline:

1. Pivot Analysis: Uses standard zigzag logic to track high/low pivots. It requires three pivots to test for collinearity.
2. Adaptive Volatility Scaling: Unlike static detectors, this script scales its collinearity tolerance based on the ATR percentile. In low-volatility regimes, it demands strict alignment; in high-volatility environments, it allows for more noise.
3. Slope Classification: It calculates the normalized slope of the top and bottom boundaries. If a slope magnitude is below the "Flat-Slope Threshold," it is classified as a horizontal triangle boundary.
4. Probability Engine: Breakout probability is derived from a standard-normal CDF (Cumulative Distribution Function), comparing the current pattern's duration against a rolling 200-entry history buffer of completed patterns.
5. Volume Filtering: The indicator tracks net-volume polarity inside the pattern. If a breakout occurs on volume 1.5x greater than the 20-bar SMA, a "VOL+" tag is appended to signals.

Settings

• Zigzag Length: Sets the pivot lookback. Smaller values detect short-term micro-patterns, while larger values isolate major market structures.
• Base Collinearity Tolerance: Adjusts how strictly pivots must align to form a boundary line.
• Flat-Slope Threshold: Determines the sensitivity for identifying horizontal levels in ascending/descending triangles.
• SL Width Multiplier: Sets the stop-loss distance relative to the channel width at the point of breakout.
• Strong Break Body Z Threshold: The sensitivity for "Strong Break" alerts; higher values require more explosive price action.
• Show Pattern History Strip: Toggles a FIFO (First-In, First-Out) display of the last 10 patterns to review recent accuracy.
• Ghost Extend Bars: Controls how many bars a pattern remains visible on the chart after it has been completed or invalidated.

FAQ

How do I interpret the "VOL+" tag on a breakout? The VOL+ tag indicates that the breakout candle's volume is at least 150% of the recent average, suggesting higher institutional participation and a lower likelihood of a "fakeout."

Why are some patterns drawn with dashed lines and others solid? The indicator uses line styles to differentiate families: solid lines represent triangles (where one side is horizontal), while dashed lines represent wedges (where both sides are sloped).

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