Trendline Breakout Indicator

The Trendline Breakout Indicator tool automatically identifies and visualizes trending price channels to detect potential trend reversals and breakouts with volume confirmation.

Usage

The indicator can be used to identify bullish and bearish price structures by detecting pivots and connecting them into trendlines. Once a trendline is established, the script tracks the price in real-time and signals a breakout when the price closes beyond the trendline by a user-defined percentage.

The script offers two visualization modes:

• Channel Mode: Draws a parallel channel where the width is dynamically determined by the maximum price deviation within the range, rather than a fixed offset.
• Polygon Mode: Fills the area between the trendline and the extreme price reached, creating a wedge shape that highlights price compression.

Breakouts are marked with BO▲ (bullish) or BO▼ (bearish) labels. If the volume confirmation is enabled, a vertical box and percentage label will appear at the breakout point if the relative volume exceeds the threshold.

Details

The indicator identifies pivot highs and lows based on a configurable lookback period. Consecutive pivots of the same type form a trendline that is extended bar by bar. To filter out market noise, channels must persist for a minimum bar length before being displayed.

A breakout is confirmed based on the "Breakout %" setting:

• Bullish Channels: Price closes below the lower trendline.
• Bearish Channels: Price closes above the upper trendline.

Settings

Main Settings

• Channel/Polygon: Toggles between parallel channel and triangular wedge visualization.
• Volume % Bar: Enables or disables the volume spike visualization at the breakout point.
• Breakout %: The distance (in percentage) the price must close beyond the trendline to trigger a breakout signal.
• Slope Factor: The minimum required slope for a trendline to be validated as a trend.
• Pivot Length: The number of bars used to detect pivot highs and lows.
• Channel's Min Length: The minimum duration a channel must exist (in bars) before it is drawn on the chart.
• Volume % Breakout: The volume threshold relative to its 20-bar moving average required for volume confirmation.

FAQ

How do I access the Trendline Breakout Indicator?

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

What is the difference between Channel and Polygon mode?

Channel mode creates a parallel structure based on price deviation, while Polygon mode fills the space between the trendline and the price extreme to show compression.

Why are some channels not being drawn?

Channels will only appear once they have reached the "Channel's min length" requirement to ensure that only significant price trends are tracked.