Wedge Breakout

15 Sep

The Wedge Breakout indicator is designed to identify and signal potential breakouts from a wedge pattern, a common technical analysis formation. A wedge pattern typically forms when the price moves within converging trendlines, indicating a potential upcoming breakout either upwards (bullish) or downwards (bearish).

Identifying Pivot Points:

• The indicator first calculates pivot points, which are significant highs and lows that define the wedge's upper and lower boundaries.
  
• Pivot Lows: It identifies the lowest price points over a specified length (input_len), which serves as the lower boundary of the wedge.
  
• Pivot Highs: Similarly, it identifies the highest price points over the same length, forming the upper boundary of the wedge.
  

Drawing Trendlines:

• The pivot points are connected to form dashed trendlines that represent the upper and lower boundaries of the wedge.
  
• The indicator uses the SimpleTrendlines library to manage and draw these trendlines dynamically:
  
• Green Trendline: Indicates an upward slope (bullish).
  
• Red Trendline: Indicates a downward slope (bearish).
  

Calculating the Breakout Conditions:

• A breakout is confirmed when the price action fulfills two conditions:
  
• The candle's high exceeds the upper trendline's highest point.
  
• The candle's low drops below the lower trendline's lowest point.
  
• This condition suggests that the price is squeezing within the wedge pattern and is about to break out.
  

Determining Breakout Direction:

• The direction of the breakout is determined by the candle's closing position relative to its opening:
  
• Bullish Breakout (Upward): When the candle closes above its opening price (close > open) after breaching both trendlines, it suggests a bullish breakout. This condition is marked with a green upward triangle .
  
• Bearish Breakout (Downward): When the candle closes below its opening price (close < open) after breaching both trendlines, it suggests a bearish breakout. This condition is marked with a red downward triangle.
  

Visual Representation:

• Green Triangle Up: Plotted below the bar to indicate a potential bullish breakout.
  
• Red Triangle Down: Plotted above the bar to indicate a potential bearish breakout.
  

Used library:

15 Sep

Nota Keluaran

fixed intersection rule

16 Sep

Nota Keluaran

fixed calculation by past intersections

2 Okt

Nota Keluaran

improved direction mechanism with: