Breakout and Retest Signals

The Breakout and Retest Signals indicator identifies key price structures where the market breaks through a previous pivot level and subsequently returns to test it, helping traders spot high-probability trend continuation or reversal opportunities.

Usage

The tool is designed to automate the detection of price action patterns that involve historical swing points. When a breakout and retest occur within the user-defined ATR tolerance, the script generates a visual signal.

• Visual Structures: Shaded boxes highlight the zones where the breakout and retest interaction took place. A dashed line represents the median level of the support/resistance zone.
• Volume Analysis: Labels appear at signal points showing the volume delta. The shaded boxes are also split to represent the ratio of buying vs. selling volume during the retest phase, providing context on whether the test is likely to hold or fail.
• Confirming Trends: Bullish signals (upward arrows) suggest the price has broken above a resistance level and successfully retested it as support. Bearish signals (downward arrows) suggest the price has broken below support and retested it as resistance.

Details

The script uses pivot point analysis to track a specific number of recent swing highs and lows stored in memory. It compares current price action against these historical levels to determine if a retest is occurring. To filter out noise, it employs an ATR-based tolerance filter; if the distance between a new pivot and a previous one is within this tolerance, it is considered a valid retest. The volume data is calculated using a requested lower timeframe to provide a more granular view of the buying and selling pressure during the breakout event.

Settings

Pivot Settings

• Period: The number of bars used to identify swing highs and lows.
• Confirmation Multiplier: Adjusts how quickly the script confirms a pivot. Higher values result in faster, but potentially more sensitive, signals.
• Swing Points Memory: The number of recent historical swing points the script maintains for comparison.
• ATR Length: The lookback period for the Average True Range calculation used to determine the tolerance zone.
• ATR Multiplier: Multiplied by the ATR to define the maximum distance allowed for a pivot to be considered a "retest" of a previous level.
• Lower Timeframe Value: The timeframe used to fetch volume delta and buy/sell ratio data.

Appearance Settings

• Bullish Color: Sets the color for bullish breakout boxes and labels.
• Bearish Color: Sets the color for bearish breakout boxes and labels.

FAQ

How do I use the volume ratio in the boxes?

The boxes are split into two colors; the larger portion represents the dominant volume type (buying or selling) during the retest. If a bullish retest shows a large green section, it indicates strong buying interest at that support level.

Why are some pivots not marked as retests?

If the vertical distance between a new pivot and a stored historical swing point exceeds the tolerance (calculated via ATR Multiplier), the script will ignore it to ensure only tight, relevant retests are signaled.

How can I get access to Breakout and Retest Signals?

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