Swing Breakout System (SBS)

The Swing Breakout System (SBS) indicator is a specialized technical analysis tool designed to identify high-probability entry points by tracking a specific six-point sequence of price swings and liquidity manipulation.

Usage

The indicator automatically identifies both bullish and bearish SBS patterns. When a valid sequence is detected, the script draws connecting lines between the swing points and places labels to confirm the pattern completion.

• Bullish Pattern: Comprised of a sequence (0-5) starting from a Low (0), followed by a Higher High (1), a Higher Low (2), a new Higher High (3), and finally two points (4 and 5) that take liquidity below the level set at step 2 before continuing upward.
• Bearish Pattern: Comprised of a sequence (0-5) starting from a High (0), followed by a Lower Low (1), a Lower High (2), a new Lower Low (3), and finally two points (4 and 5) that take liquidity above the level set at step 2 before continuing downward.

A successful breakout is visualized with an arrow (↑ for bullish, ↓ for bearish) at the final stage of the sequence.

Details

The SBS strategy is built on the concept of liquidity accumulation and manipulation. In this sequence, liquidity is established at step 2. Step 3 creates a "failed" new high or low, which induces market participants to enter. Steps 4 and 5 represent the manipulation phase, where price retraces to clear out the liquidity (stop losses) residing behind the key level established at step 2. Once this liquidity is swept, the price is expected to resume its original direction with increased momentum.

The script uses pivot high and low logic to track six consecutive swing points stored in arrays. It filters patterns based on their vertical height (percentage) and horizontal width (number of bars) to ensure only significant market structures are highlighted.

Settings

• Pivot Lookback Period: Determines the number of bars required to confirm a pivot point. Increasing this value results in fewer, more significant swings.
• Minimum Pattern Height %: The minimum price distance between the highest and lowest points of the pattern, expressed as a percentage. This filters out market noise.
• Maximum Pattern Width (bars): The maximum duration allowed for the six-point sequence to form.
• Show Labels: Toggles the numerical labels (0-5) on the chart.
• Bullish Pattern / Bearish Pattern: Customization options for the colors used to draw the patterns and arrows.

FAQ

How can I access the Swing Breakout System (SBS)?

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

Why are patterns not appearing frequently?

The SBS requires a specific, "perfect" sequence of 6 swing points and must meet the height and width filters defined in the settings. This ensures only high-quality setups are shown.

Can I use this for intraday trading?

Yes, the indicator is designed to work on various timeframes. However, you may need to adjust the Pivot Lookback and Pattern Width settings to suit the volatility of your chosen timeframe.