Volume Sentiment Breakout Channels [AlgoAlpha]🟠 OVERVIEW
This tool visualizes breakout zones based on volume sentiment within dynamic price channels . It identifies high-impact consolidation areas, quantifies buy/sell dominance inside those zones, and then displays real-time shifts in sentiment strength. When the market breaks above or below these sentiment-weighted channels, traders can interpret the event as a change in conviction, not just a technical breakout.
🟠 CONCEPTS
The script builds on two layers of logic:
Channel Detection : A volatility-based algorithm locates price compression areas using normalized highs and lows over a defined lookback. These “boxes” mark accumulation or distribution ranges.
Volume Sentiment Profiling : Each channel is internally divided into small bins, where volume is aggregated and signed by candle direction. This produces a granular sentiment map showing which levels are dominated by buyers or sellers.
When a breakout occurs, the script clears the previous box and forms a new one, letting traders visually track transitions between phases of control. The colored gradients and text updates continuously reflect the internal bias—green for net-buying, red for net-selling—so you can see conviction strength at a glance.
🟠 FEATURES
Volume-weighted sentiment map inside each box, with gradient color intensity proportional to participation.
Dynamic text display of current and overall sentiment within each channel.
Real-time trail lines to show active bullish/bearish trend extensions after breakout.
🟠 USAGE
Setup : Add the script to your chart and enable Strong Closes Only if you prefer cleaner breakouts. Use shorter normalization length (e.g., 50–80) for fast markets; longer (100–200) for smoother transitions.
Read Signals : Transparent boxes mark active sentiment channels. Green gradients show buy-side dominance, red shows sell-side. The middle dashed line is the equilibrium of the channel. “▲” appears when price breaks upward, “▼” when it breaks downward.
Understanding Sentiment : The sentiment profile can be used to show the probability of the price moving up or down at respective price levels.
