I created the "Pivot Extremes Breakout" (PEB) indicator to easily spot breakout zones using pivot points. This tool comes from my need to anticipate market direction and capitalize on breakouts. PEB uses the last two pivot points to predict price paths and highlights potential breakout areas, adjusting for any timeframe. It simplifies seeing where the market might move next with color-coded lines and zones, aiming to improve your trading decisions.
Release Notes
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Added a "Show/Hide Pivots" toggle to the "Pivot Extremes Breakout" indicator settings, allowing users to choose whether to display pivot points on the chart for a cleaner view and focused analysis.
Release Notes
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Optimized Extrapolation Method: Updated the extrapolation function for pivot points, providing clearer insights into potential breakout zones.
Example 1: Going Long on a Bullish Breakout Situation: The PEB indicator plots a green line extrapolated from the last two high pivot points. You notice the current price action breaks above this green line.
Action: This is an indication of a bullish breakout, suggesting a potential upward trend. You could consider taking a long position here, betting on the price to continue rising. Consideration: Ensure to set a stop-loss order just below the most recent pivot low to minimize potential losses if the market moves against your prediction. Example 2: Going Short on a Bearish Breakout Situation: Conversely, the indicator plots a red line extrapolated from the last two low pivot points. The market price dips below this red line.
Action: This signals a bearish breakout, implying a potential downward trend. In this scenario, you might want to open a short position, anticipating further declines in price. Consideration: Place a stop-loss order slightly above the most recent pivot high to protect your trade from an unexpected reversal. Example 3: Trade Management and Exit Strategy Situation: After entering a trade based on a breakout signal from the PEB indicator, you observe how the price action continues in relation to the extrapolated pivot lines.
Action: Use these lines as dynamic support (for a long position) or resistance (for a short position) levels to manage your trade. For instance, if the price remains above the green line after going long, it may reaffirm your bullish outlook, suggesting it could be beneficial to hold onto the position. Consideration: You can adjust your stop-loss order in line with the moving pivot lines to secure profits or limit losses as the market evolves. Also, consider using other indicators or volume data for additional confirmation before deciding to exit or adjust your position.
Key Tips: Confirmation: Always wait for a candle to close beyond the breakout line to confirm the signal. This helps in avoiding false breakouts. Complementary Indicators: Enhance your decision-making by incorporating other technical analysis tools or indicators, such as moving averages, RSI, or MACD, to confirm the breakout's strength.
Risk Management: Define your risk tolerance upfront and adhere to it by setting appropriate stop-loss and take-profit orders. By following these examples, you'll be able to leverage the PEB indicator to spot potential breakout opportunities, make informed entry and exit decisions, and manage your trades more effectively. Remember, practice and continuous learning are key to mastering any trading strategy.
bloodbound696
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Hi I am really struggling on how to use this? Can you help me like I'm lost on how I would utilize this correctly can you give me 3 examples?
Situation: The PEB indicator plots a green line extrapolated from the last two high pivot points. You notice the current price action breaks above this green line.
Action: This is an indication of a bullish breakout, suggesting a potential upward trend. You could consider taking a long position here, betting on the price to continue rising.
Consideration: Ensure to set a stop-loss order just below the most recent pivot low to minimize potential losses if the market moves against your prediction.
Example 2: Going Short on a Bearish Breakout
Situation: Conversely, the indicator plots a red line extrapolated from the last two low pivot points. The market price dips below this red line.
Action: This signals a bearish breakout, implying a potential downward trend. In this scenario, you might want to open a short position, anticipating further declines in price.
Consideration: Place a stop-loss order slightly above the most recent pivot high to protect your trade from an unexpected reversal.
Example 3: Trade Management and Exit Strategy
Situation: After entering a trade based on a breakout signal from the PEB indicator, you observe how the price action continues in relation to the extrapolated pivot lines.
Action: Use these lines as dynamic support (for a long position) or resistance (for a short position) levels to manage your trade. For instance, if the price remains above the green line after going long, it may reaffirm your bullish outlook, suggesting it could be beneficial to hold onto the position.
Consideration: You can adjust your stop-loss order in line with the moving pivot lines to secure profits or limit losses as the market evolves. Also, consider using other indicators or volume data for additional confirmation before deciding to exit or adjust your position.
Key Tips:
Confirmation: Always wait for a candle to close beyond the breakout line to confirm the signal. This helps in avoiding false breakouts.
Complementary Indicators: Enhance your decision-making by incorporating other technical analysis tools or indicators, such as moving averages, RSI, or MACD, to confirm the breakout's strength.
Risk Management: Define your risk tolerance upfront and adhere to it by setting appropriate stop-loss and take-profit orders.
By following these examples, you'll be able to leverage the PEB indicator to spot potential breakout opportunities, make informed entry and exit decisions, and manage your trades more effectively. Remember, practice and continuous learning are key to mastering any trading strategy.