02 SMC + BB Breakout (Improved)

The 02 SMC + BB Breakout (Improved) indicator tool integrates Smart Money Concepts (SMC) with Bollinger Band volatility analysis to identify high-probability breakout opportunities confirmed by market structure.

Usage

The Usage section highlights how this tool combines trend, momentum, and structure to generate signals. Traders can use the tool to identify potential long and short entries based on the following logic:

• Long Entry: Occurs when the price crosses above the upper Bollinger Band, provided a bullish Market Structure Shift (MSS) has occurred. If the momentum filter is enabled, the candle must also have a strong body relative to its range.
• Short Entry: Occurs when the price crosses below the lower Bollinger Band, provided a bearish MSS has occurred.
• Exits: Positions are typically exited when the price returns to the Bollinger Band basis (middle line) or if price breaches the identified order block levels (99% of OB low for longs, 101% of OB high for shorts).

Details

The script operates by synthesizing three distinct technical layers:

1. Volatility Breakouts: Utilizing Bollinger Bands to detect periods where price expands beyond standard deviation limits.
2. Market Structure: Identifying recent swing highs and lows to detect Market Structure Shifts (MSS). This ensures that a breakout is aligned with a change in price action character.
3. Order Blocks & Liquidity: The tool calculates order blocks based on lookback periods to serve as support/resistance zones and exit targets.
4. Momentum Filtering: An optional body-to-wick ratio calculation ensures that entries are only triggered on "decisive" candles, filtering out weak or exhausted breakouts.

Settings

• Bollinger Bands Length: Sets the lookback period for the SMA basis and standard deviation calculation.
• Standard Deviation Multiplier: Adjusts the width of the upper and lower bands.
• Show SMC Elements: Toggles the visibility of order blocks and swing levels on the chart.
• Order Block Lookback: Determines the number of bars used to calculate the highest highs and lowest lows for OB identification.
• Swing Lookback: Defines the window for identifying recent swing points used for Market Structure Shifts.
• Require Momentum Candle for Entry: When enabled, entries only trigger if the candle body meets a specific percentage of the total candle range.
• Momentum Candle Body %: The minimum percentage of the candle's total range that must be represented by the body for it to be considered a momentum candle.
• Risk Percent per Trade: Determines the position size based on a fixed percentage of available strategy equity.

FAQ

How do I interpret the dashed lines on the chart? The dashed lines represent identified Order Blocks. The red dashed line tracks the recent highest high (resistance), while the green dashed line tracks the recent lowest low (support).

What is a Market Structure Shift (MSS) in this script? A bullish MSS is detected when the closing price breaks above a previous swing high, and a bearish MSS is detected when it breaks below a previous swing low, using the user-defined swing lookback.

How can I access 02 SMC + BB Breakout (Improved)? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.