Qullamaggie Breakout

The Qullamaggie Breakout indicator tool is designed to identify high-momentum breakout opportunities on lower timeframes while filtering for the prevailing long-term trend. It aims to capture explosive moves by entering at pivot high breaks and utilizing higher timeframe moving averages for trend confirmation and trailing stop-loss management.

Usage

The script is primarily used to trade momentum setups where a period of consolidation is followed by a price breakout.

• Entry: A long entry is triggered when price crosses over a recent swing high (pivot high) defined by the lookback period.
• Trend Filtering: By default, the script looks at a higher timeframe (e.g., Daily) to ensure the trade is in the direction of the primary trend. Users can choose to ignore signals where price is below the 50-period SMA to avoid counter-trend trades.
• Trailing Stop: Once in a position, the script provides a trailing stop based on a Higher Timeframe (HTF) moving average. You can select between a faster (e.g., 10 MA) or slower (e.g., 20 MA) trailing stop to ride the trend until a close occurs below the selected average.
• Volatility Filtering: The optional ATR filter helps identify "tight" consolidations. If the distance between the breakout level and the initial stop is too large relative to the Daily ATR, the signal is ignored to avoid buying extended moves.

Details

The script implements several key concepts popularized by momentum traders:

• Multi-Timeframe Analysis: It calculates Moving Averages from a user-defined higher timeframe to provide a "bird's eye view" of the trend while executing trades on the local timeframe.
• Pivot Levels: It dynamically identifies swing highs and lows to set entry trigger levels and initial stop-loss points.
• Risk Management: It utilizes a hard stop based on the lowest low of a specific lookback period, which then transitions into a trailing stop based on moving average closes once the trade moves in your favor.

Settings

Detection & Stops

• Lookback Period for Swing High: Determines the number of bars used to identify the pivot high that acts as the breakout level.
• Lookback Bars for Stop Level: Sets the number of bars used to find the lowest low for the initial stop-loss placement.
• Timeframe of Moving Averages: Defines the higher timeframe used for calculating trend filters and trailing stops.

Moving Averages

• Moving Average Type: Choose between EMA or SMA for calculations.
• 1st/2nd/3rd Moving Average Length: Customize the periods for the three MAs (Defaults: 10, 20, 50).
• Use 3rd Moving Average for Filtering: Toggles the long-term trend filter (Default 50 MA).
• Trailing Stop: Select which MA (1st or 2nd) will be used to trail the position.

Volatility

• Use ATR for Filtering: Enables/disables the volatility contraction filter.
• % of Daily ATR Value: Sets the threshold for how wide a consolidation can be relative to daily volatility to be considered a valid "tight" setup.

FAQ

How do I use the higher timeframe settings?

You should typically run the script on a lower timeframe (like the 1H or 15m) and set the "Timeframe of Moving Averages" to the Daily (1D). This allows you to catch the exact breakout moment while staying aligned with daily trend structures.

What is the purpose of the ATR filter?

The ATR filter ensures that the "risk" (distance to stop) isn't too large. Many breakout strategies work best when the price has tightly consolidated; a large range relative to ATR often suggests the move is already exhausted or "loose."

How can I access this tool?

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