Monster Breakout Index
May 14, 2020
The Monster Breakout Index indicator is a robust breakout detection tool designed to identify high-quality trend shifts by comparing price action against historical median price ranges.
Usage
The Monster Breakout Index is used to identify potential trend reversals or continuations through breakout signals. The indicator displays as a histogram on a separate pane, making it easy to interpret the current market state.
- Bullish Signal (Green): Occurs when the current bar's closing price is higher than the highest median price (HL2) of the lookback period.
- Bearish Signal (Red): Occurs when the current bar's closing price is lower than the lowest median price (HL2) of the lookback period.
- No Signal (Blue/Neutral): Occurs when the price remains within the historical median range, suggesting consolidation or a lack of clear momentum.
The script is designed to provide selective, high-conviction signals rather than frequent noise, making it suitable for traders looking for significant market moves.
Details
The Monster Breakout Index operates on a logic centered around the median price (HL2) of each bar. The script follows a specific calculation process:
- It calculates the median price (High + Low / 2) for each bar.
- It identifies the highest and lowest median values over a user-defined lookback period (n).
- It compares the current closing price to these historical extremes.
By using the median price as a reference point for the lookback period instead of just the high or low, the indicator filters out some of the extreme wick volatility, focusing instead on the core price action of the period.
Settings
- Period: Determines the lookback window (n) used to find the highest and lowest median prices. The recommended default setting is 12.
FAQ
How do I interpret the colors?
A green column indicates a bullish breakout, a red column indicates a bearish breakout, and a blue column indicates the price is within the historical range.
Can I use this for intraday trading?
Yes, the indicator is versatile and can be applied to any timeframe, though the "Period" setting may need adjustment based on the volatility of the specific timeframe.
How can I access the Monster Breakout Index?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
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