BREAKOUT TradingView Indicator 💥🚀

Summary

This video demonstrates how to use the Lux Algo Range Detector on TradingView to identify massive breakout opportunities in the market. The script covers setting up the indicator, adjusting key settings like range length, width, and ATR, and combining it with the volume indicator to confirm breakouts. The guide explains how to spot strong momentum candles, ensure high volume during breakouts, and set stop-loss and profit targets. It also emphasizes the importance of risk-to-reward ratios for successful trades and suggests combining volume for better trade accuracy.

Takeaways

• 😀 Open a clean chart and select the 15-minute time frame for better analysis (US Oil was used in the example).
• 😀 Search for 'Lux Algo Range Detector' in TradingView and add it to your chart for breakout detection.
• 😀 Adjust the 'Minimum Range Length' to around 30 for more significant ranges, but avoid making it too large to prevent missing important signals.
• 😀 Keep the 'Range Width' at the default setting (1) to avoid overly wide or false signals.
• 😀 The ATR length can be reduced from the standard 500 to around 200 or 100 to make the indicator more sensitive to breakouts.
• 😀 You can choose to show or hide the vertical gray lines that indicate the candle confirming the range.
• 😀 To confirm a breakout, use the Volume indicator and look for a large momentum candle with increased volume.
• 😀 A good breakout trade is confirmed when a strong candlestick appears with larger volume compared to the range candles.
• 😀 Avoid false breakout signals by waiting for confirmation with strong volume and momentum, especially if the first breakout is weak.
• 😀 Set your stop-loss below the most recent low within the range for protection, allowing for some wiggle room.
• 😀 Aim for a risk-to-reward ratio of at least 2:1, but higher ratios (3:1 or more) are possible in strong breakout situations.

Q & A

What is the purpose of using the Lux Algo Range Detector indicator in the video?

The Lux Algo Range Detector indicator helps identify significant breakouts in the market by detecting trading ranges and their subsequent breakouts, making it easier to spot potential trading opportunities.

How do you apply the Lux Algo Range Detector indicator in TradingView?

You can apply the Lux Algo Range Detector by navigating to the 'Indicators' tab in TradingView, searching for 'Lux Algo', and selecting 'Range Detector' from the options.

What adjustments are recommended for the Lux Algo Range Detector indicator settings?

The recommended adjustments include setting the 'Minimum Range Length' to around 30, keeping the 'Range Width' at 1, and lowering the 'ATR Length' to 200 for more responsive breakout signals.

Why is it important to adjust the 'Minimum Range Length' setting?

Adjusting the 'Minimum Range Length' allows traders to make the ranges more significant by increasing the length, which helps avoid false signals. However, setting it too high may cause missed opportunities.

How does the 'Range Width' setting affect the breakout signals?

The 'Range Width' setting determines how wide or tight the trading ranges appear. Setting it to 1 typically works well, while increasing it may result in less significant ranges and more false signals.

What role does volume play in confirming breakouts?

Volume plays a critical role in confirming the strength of a breakout. A breakout is more reliable when it is accompanied by a strong momentum candle and a significant increase in volume.

What should traders look for when confirming a valid breakout?

Traders should look for a large momentum candle that breaks the range and a corresponding increase in volume. These two factors together help confirm a valid breakout.

Why is it important to avoid breakouts with weak momentum candles and low volume?

Weak momentum candles and low volume often signal false breakouts, leading to unsuccessful trades. A lack of volume indicates that the breakout may not have enough market participation to sustain the price movement.

How do you determine where to set the stop-loss when trading breakouts?

The stop-loss should be set just below the previous low within the range. Some room for 'wiggle room' should be left to account for minor price fluctuations after the breakout.

What is a recommended risk-to-reward ratio for breakout trades?

A risk-to-reward ratio of 2:1 is typically recommended for breakout trades. However, for larger breakouts, traders may aim for higher ratios, such as 3:1 or even more, depending on the strength of the move.