Momentum Breakout Filter + ATR Zones

Momentum Breakout Filter + ATR Zones - User Guide
What This Indicator Does
This indicator helps you with your MACD + volume momentum strategy by:

Filtering out fake breakouts - Shows ⚠️ warnings when breakouts lack confirmation
Showing clear entry signals - 🚀 LONG and 🔻 SHORT labels when all conditions align
Automatic stop loss & profit targets - Based on ATR (Average True Range)
Visual trend confirmation - Background color + EMA alignment


Signal Types
🚀 LONG Entry Signal (Green Label)
Appears when ALL conditions met:

✅ MACD crosses above signal line
✅ Volume > 1.5× average
✅ Price > EMA 9 > EMA 21 > EMA 200 (bullish trend)
✅ Price closes above recent 20-bar high

🔻 SHORT Entry Signal (Red Label)
Appears when ALL conditions met:

✅ MACD crosses below signal line
✅ Volume > 1.5× average
✅ Price < EMA 9 < EMA 21 < EMA 200 (bearish trend)
✅ Price closes below recent 20-bar low

⚠️ FAKE Breakout Warning (Orange Label)
Appears when price breaks high/low BUT lacks confirmation:

❌ Low volume (below 1.5× average), OR
❌ Wick break only (didn't close through level), OR
❌ MACD not aligned with direction

Hover over the warning label to see what's missing!

ATR Stop Loss & Targets
When you get a signal, colored lines automatically appear:
Long Position

Red solid line = Stop Loss (Entry - 1.5×ATR)
Green dashed lines = Profit Targets:

Target 1: Entry + 2×ATR
Target 2: Entry + 3×ATR
Target 3: Entry + 4×ATR



Short Position

Red solid line = Stop Loss (Entry + 1.5×ATR)
Green dashed lines = Profit Targets:

Target 1: Entry - 2×ATR
Target 2: Entry - 3×ATR
Target 3: Entry - 4×ATR



The lines move with each bar until you exit the position.

Chart Elements
Moving Averages

Blue line = EMA 9 (fast)
Orange line = EMA 21 (medium)
White line = EMA 200 (trend filter)

Volume

Yellow bars = High volume (above threshold)
Gray bars = Normal volume

Background Color

Light green = Bullish trend (all EMAs aligned up)
Light red = Bearish trend (all EMAs aligned down)
No color = Neutral/mixed

MACD (Bottom Pane)

Green/Red columns = MACD Histogram
Blue line = MACD Line
Orange line = Signal Line


Info Dashboard (Bottom Right)
ItemWhat It ShowsVolumeCurrent volume vs average (✓ HIGH or ✗ Low)MACDDirection (BULLISH or BEARISH)TrendEMA alignment (BULL, BEAR, or NEUTRAL)ATRCurrent ATR value in dollarsPositionCurrent position (LONG, SHORT, or NONE)R:RRisk-to-Reward ratio (shows when in position)

How To Use It
Basic Workflow

Wait for setup

Watch for MACD to approach signal line
Volume should be building
Price should be near EMA structure


Get confirmation

Wait for 🚀 LONG or 🔻 SHORT label
Check dashboard shows "✓ HIGH" volume
Verify trend is aligned (green or red background)


Enter the trade

Enter when signal appears
Note your stop loss (red line)
Note your targets (green dashed lines)


Manage the trade

Exit at first target for partial profit
Move stop to breakeven
Trail remaining position



What To Avoid
❌ Don't trade when you see:

⚠️ FAKE labels (wait for confirmation)
Neutral background (no clear trend)
"✗ Low" volume in dashboard
MACD and Trend not aligned


Settings You Can Adjust
Volume Sensitivity

High Volume Threshold: Default 1.5×

Increase to 2.0× for cleaner signals (fewer trades)
Decrease to 1.2× for more signals (more trades)



Fake Breakout Filters
You can toggle these ON/OFF:

Volume Confirmation: Requires high volume
Close Through: Requires candle close, not just wick
MACD Alignment: Requires MACD direction match

Tip: Turn all three ON for highest quality signals
ATR Stop/Target Multipliers
Default settings (conservative):

Stop Loss: 1.5×ATR
Target 1: 2×ATR (1.33:1 R:R)
Target 2: 3×ATR (2:1 R:R)
Target 3: 4×ATR (2.67:1 R:R)

Aggressive traders might use:

Stop Loss: 1.0×ATR
Target 1: 2×ATR (2:1 R:R)
Target 2: 4×ATR (4:1 R:R)

Conservative traders might use:

Stop Loss: 2.0×ATR
Target 1: 3×ATR (1.5:1 R:R)
Target 2: 5×ATR (2.5:1 R:R)


Example Trade Scenarios
Scenario 1: Perfect Long Setup ✅

Stock consolidating near EMA 21
MACD curling up toward signal line
Volume bar turns yellow (high volume)
🚀 LONG label appears
Red stop line and green target lines appear
Result: High probability trade

Scenario 2: Fake Breakout Avoided ✅

Price breaks above resistance
Volume is normal (gray bar)
⚠️ FAKE label appears (hover shows "Low volume")
No entry signal
Price falls back below breakout level
Result: Avoided losing trade

Scenario 3: Premature Entry ❌

MACD crosses up
Volume is high
BUT trend is NEUTRAL (no background color)
No signal appears (trend filter blocks it)
Result: Avoided choppy/sideways market


Quick Reference
Entry Checklist

🚀 or 🔻 label on chart
Dashboard shows "✓ HIGH" volume
Dashboard shows aligned MACD + Trend
Colored background (green or red)
ATR lines visible
No ⚠️ FAKE warning

Exit Strategy

Target 1 (2×ATR): Take 50% profit, move stop to breakeven
Target 2 (3×ATR): Take 25% profit, trail stop
Target 3 (4×ATR): Take remaining profit or trail aggressively
Stop Loss: Exit entire position if hit


Alerts
Set up these alerts:

Long Entry: Fires when 🚀 LONG signal appears
Short Entry: Fires when 🔻 SHORT signal appears
Fake Breakout Warning: Fires when ⚠️ appears (optional)


Tips for Success

Use on 5-minute charts for day trading momentum plays
Only trade high volume stocks ($5-20 range works best)
Wait for full confirmation - don't jump early
Respect the stop loss - it's calculated based on volatility
Scale out at targets - don't hold for home runs
Avoid trading first 15 minutes - let market settle
Best during 10am-11am and 2pm-3pm - peak momentum times


Common Questions
Q: Why didn't I get a signal even though MACD crossed?
A: All conditions must be met - check dashboard for what's missing (likely volume or trend alignment)
Q: Can I use this on any timeframe?
A: Yes, but it's designed for 5-15 minute charts. On daily charts, adjust ATR multipliers higher.
Q: The stop loss seems too tight, can I widen it?
A: Yes, increase "Stop Loss (×ATR)" from 1.5 to 2.0 or 2.5 in settings.
Q: I keep seeing FAKE warnings but price keeps going - what gives?
A: The filter is conservative. You can disable some filters in settings, but expect more false signals.
Q: Can I use this for swing trading?
A: Yes, but use larger timeframes (1H or 4H) and adjust ATR multipliers up (3× for stops, 6-9× for targets).