Trendlines with Breaks Oscillator

The Trendlines with Breaks Oscillator is a powerful trading indicator designed to measure momentum and trend direction by analyzing the distance between bullish and bearish trendline breakouts. Built upon the original Trendlines with Breaks indicator, this oscillator offers a visual and dynamic way to understand when momentum shifts occur, detect divergences, and spot potential trend reversals early.

Unlike conventional oscillators, this tool is rooted in price structure and breakout logic, making it ideal for traders who combine price action with technical indicators for deeper confirmation.

How to Trade with the Trendlines with Breaks Oscillator

This oscillator extends the capabilities of our Trendlines with Breaks indicator — which identifies and highlights bullish and bearish trendline breaks on the chart — by translating those breakouts into an easy-to-read momentum oscillator.

It tracks the maximum distance between price and the break of bullish and bearish trendlines, then calculates the delta between the two. When the oscillator is above zero, the market is showing bullish momentum; when it’s below zero, bearish momentum dominates.

• An ascending slope signals strengthening upward momentum.
• A descending slope shows weakening momentum or downward pressure.

Green and red dots appear on the oscillator to mark breakout events:

• Green dots = bullish breakouts from descending trendlines.
• Red dots = bearish breakouts from ascending trendlines.

The oscillator’s responsiveness is controlled by two settings: Short Alpha Length and Long Alpha Length. These parameters create synthetic EMAs that smooth bullish and bearish break distances differently. The difference between the two forms the oscillator value.

Larger alpha values create smoother, slower reactions — ideal for tracking major market trends — while smaller alphas make the oscillator more sensitive to short-term price movements.

The oscillator uses the same trendline detection logic as the base indicator, built from three main components:

• Swing length (the lookback for swing highs and lows)
• Slope steepness
• Slope calculation method

Adjusting these parameters allows traders to tailor the oscillator’s sensitivity to their trading style — from short-term breakouts to longer-term market trends.

Using the Signal Line for Trading Confirmation

The Signal Line smooths out oscillator fluctuations and helps confirm potential entry and exit signals.
When the oscillator crosses the signal line:

• Bullish crossovers (oscillator crossing above signal line) often precede upward corrections or rallies.
• Bearish crossovers (oscillator crossing below signal line) often precede downward corrections or pullbacks.

Traders can choose among 10 different smoothing methods and customize the smoothing length to adjust the balance between reactivity and stability.

Spotting Divergences for Early Reversals

The built-in divergence detector identifies momentum weakening or strengthening relative to price action — a powerful clue for potential reversals.

• Bearish divergence: price makes higher highs, but the oscillator forms lower highs.
• Bullish divergence: price makes lower lows, but the oscillator forms higher lows.

You can fine-tune the detection length to control how sensitive the divergence detector is. Shorter lengths pick up smaller divergences, while longer ones filter out noise and focus on major market turning points.

Settings Overview

Trendlines

• Swing Detection Lookback: Defines how far back to look for swing highs/lows when detecting trendlines.
• Slope: Adjusts steepness; 0 for flat levels, values above 1 for steeper lines.
• Slope Calculation Method: Selects the method used to determine trendline angles.

Oscillator

• Short Alpha Length: Defines the short-term synthetic EMA smoothing period.
• Long Alpha Length: Defines the long-term synthetic EMA smoothing period.
• Smoothing Signal: Choose the smoothing method and period for the signal line.
• Divergences: Toggle on/off and set the detection length.

Style

• Bullish: Customize the bullish color.
• Bearish: Customize the bearish color.

FAQ

What is the Trendlines with Breaks Oscillator used for?
It helps traders visualize momentum shifts and trend strength based on the distance between bullish and bearish trendline breaks — making it useful for spotting trend continuations or reversals.

How do I interpret the oscillator values?
Values above zero indicate bullish momentum; below zero indicate bearish. The slope direction also helps confirm momentum strength.

Does the oscillator repaint?
No, it updates in real-time using confirmed breakouts and historical price data from the Trendlines with Breaks algorithm.

How can I access the Trendlines with Breaks Oscillator?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.