Breakout and Retest Signals [AlgoAlpha]

Feb 26

OVERVIEW

This script detects breakout and retest signals by identifying key pivot points in price action and analyzing their relationship with historical swing highs and lows. It highlights breakout structures using ATR-based tolerance levels and volume analysis to confirm potential trend continuations or reversals. The script marks significant price levels with dynamic boxes and dashed lines to help traders visualize breakout and retest areas effectively.

CONCEPTS

The script relies on pivot point analysis, a technique used to identify significant price levels where the market has previously reversed. It dynamically tracks a set number of recent swing highs and lows, allowing traders to see if the price is revisiting a previously significant level. The concept of breakouts and retests is widely used in technical analysis to determine potential entry points. A breakout occurs when the price moves beyond a resistance or support level, and a retest happens when the price returns to test that level before continuing in the breakout direction. This script enhances that analysis by incorporating ATR-based tolerance levels, ensuring that price zones are not too large.

FEATURES

1. Breakout and Retest Markings: Highlights breakout and retest areas with shaded boxes, allowing traders to visualize where price action is confirming key levels.
   
2. Volume Delta and Ratio: Analyzes volume at breakout levels to gauge the strength of the move, displaying volume delta information for additional context. The script also displays the ratio of selling to buying at the retest along traders to make better judgement on their entries.
   
3. Multi-Timeframe Adaptability: Dynamically adjusts volume analysis to align with the appropriate lower timeframe, ensuring reliable volume comparisons.
   
4. Alerts for Breakout and Retest Events: Traders can receive real-time notifications when bullish or bearish breakout retests are detected.
   

USAGE

This script is best suited for traders looking to identify strong breakout and retest setups across different timeframes. Users can customize the pivot detection period and swing point memory to adjust sensitivity based on their trading style. The ATR length and multiplier allow further refinement of breakout tolerance, reducing noise in volatile markets. The breakout zones are displayed as shaded boxes, where traders can assess whether a price retest is occurring under favorable conditions. Alerts can be set to notify traders of potential trade opportunities.

Feb 26

Release Notes

Added an input for control the confirmation length before drawing the zones.

Feb 27

Release Notes

Fixed a minor typo

Mar 25

Release Notes

Switched to input based lower time frame.