Breakout Odds [Rider Algo]

Breakout Odds v4 — Empirical Breakout Probability with Directional Bias & Quality Filters

What it does: Quantifies breakout probability (0–100) and breakout directional bias (-100 to +100), then applies quality filters so only high-conviction setups signal.

What Is This Indicator?
When price is stuck in a range, Breakout Odds v4 answers:

1. "How likely is a breakout right now?" → Score 0 to 100
2. "Which direction will it go?" → Bias -100 (bearish) to +100 (bullish)

Instead of relying on a single trigger, it combines 9 independent factors — 5 for probability and 4 for direction — into a unified weighted model, then applies 3 quality filters (trend alignment, candle confirmation, cooldown) to block low-quality signals.
When everything aligns, it prints a directional signal: 🟢 BULL triangle or 🔴 BEAR triangle.

This is not a crystal ball. It’s a confirmation framework designed to keep you out of weak breakouts.

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The Architecture
The indicator runs as a 3-stage pipeline:

• Stage 1 → Probability Engine: “Is a breakout likely?” (Score 0–100)
  
• Stage 2 → Direction Engine: “Which way?” (Bias -100 to +100)
  
• Stage 3 → Quality Filters: “Is this signal worth taking?” (Pass / Block)
  

Signals only fire when all three stages agree.

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Stage 1: Breakout Probability (Score 0–100)
This engine measures how “ready” the market is to break out of the current range, using five conditions that often precede strong breakouts:

1. Bollinger Band Width (default weight: 25%)
   Measures BB compression vs recent history. Narrow bands = coiled spring → higher score.
   
2. ATR Compression (default weight: 20%)
   Compares current ATR% vs its lookback range. Confirms volatility squeeze (layer-2 validation).
   
3. Relative Volume (default weight: 25%)
   Current volume vs average volume. Rising volume during compression suggests accumulation.
   Capped at 3× avg to avoid single-spike distortion.
   
4. Distance to Range Edges (default weight: 15%)
   How close price is to the nearest range boundary (high/low). Closer = more imminent.
   
5. Level Tests (default weight: 15%)
   Counts touches/approaches to range ceiling/floor. More tests weaken the level → higher break odds.
   

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Stage 2: Directional Bias (-100 to +100)
Once probability says “breakout is likely,” the direction engine estimates which way using four factors:

1. Price Position Within Range (default weight: 30%)
   Above midpoint / pressing ceiling = bullish bias. Below midpoint / pressing floor = bearish bias.
   
2. Volume Pressure at Levels (default weight: 30%)
   Compares total volume near range high vs range low. More volume near highs → buying pressure (bullish).
   More near lows → selling pressure (bearish).
   
3. Short-Term Momentum Slope (default weight: 20%)
   Linear regression slope over N bars. Rising slope = bullish momentum, falling slope = bearish.
   
4. Candle Bias Analysis (default weight: 20%) — Optional, ON by default
   Body-to-range quality scoring over a lookback (default 10). Clean bodies (small wicks) count more.
   Measures the balance + quality of bullish vs bearish candles.
   

Interpretation:

• Bias > 0 = bullish, Bias < 0 = bearish
  
• |Bias| = confidence (shown as Dir Strength in the panel)
  

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Stage 3: Quality Filters
This is what makes v4 materially more selective than earlier versions.

Filter 1: Trend Alignment (EMA) — Optional, ON by default
A 200 EMA sets macro trend rules:

• BULL signals allowed only when price is above EMA
  
• BEAR signals allowed only when price is below EMA
  

This eliminates the classic mistake: bull signals in downtrends and bear signals in uptrends.
Disable if your strategy is counter-trend.

Filter 2: Candle Confirmation — Always active
Signals do not fire just because score crosses the threshold.
It waits for the candle to close at or beyond the range edge.
If score is high but price is still mid-range, no signal.

Filter 3: Signal Cooldown — Configurable (default: 10 bars)
After a signal prints, no new signals for X bars.
Prevents clustering when score oscillates around the threshold in chop.

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How to Read the Indicator

Visual Elements

• Score Line (colored): probability line with dynamic zones
  🟢 Green (80–100): High breakout probability
  🟡 Yellow (60–79): Moderate — watch closely
  🟠 Orange (40–59): Low — range likely holds
  🔴 Red (0–39): Very low — no breakout expected
  
• Shaded Area (green/red): real-time directional bias
  Green = bullish lean, red = bearish lean. Bigger = stronger conviction.
  
• Dashed White Line: signal threshold (default 70)
  
• Background Tint: when score is above threshold and trend filter agrees
  Green tint = bullish context, red tint = bearish context.
  
• Signal Triangles:🟢 BULL (bottom): confirmed bullish breakout (all filters passed)
  🔴 BEAR (top): confirmed bearish breakout (all filters passed)
  
• Info Panel (right):
  Composite score + direction (with strength), component breakdowns, and filter statuses (Trend / Confirm / Cooldown).
  

When to Act
Designed for confirmation, not prediction. Typical workflow:

1. Score climbs into 60–70+ as compression builds
   
2. Directional bias shows which side is “winning”
   
3. Wait for the confirmed BULL/BEAR triangle (score high + clear direction + filters pass + edge close)
   
4. Use your own risk plan for entry/SL/targets
   

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Customizing the Weights
You can tune every component from settings — no code edits.

Probability Weights (Score Weights group)

• Weight — BB Width (default 25%)
  
• Weight — ATR Compression (default 20%)
  
• Weight — Relative Volume (default 25%)
  
• Weight — Distance to Edges (default 15%)
  
• Weight — Level Tests (default 15%)
  

Direction Weights (Direction Weights group)

• Dir Weight — Price Position (default 30%)
  
• Dir Weight — Volume Pressure (default 30%)
  
• Dir Weight — Momentum Slope (default 20%)
  
• Dir Weight — Candle Bias (default 20%)
  

Weight Tips

• Weights do not need to sum to 100. The script normalizes automatically.
  
• Volume-driven breakouts: increase Relative Volume, reduce BB Width.
  
• Low-volume markets / off-hours: reduce Relative Volume, increase BB Width + ATR Compression.
  
• Stronger directional conviction: increase Momentum Slope + Candle Bias.
  
• Conservative: threshold 80, higher Level Tests, keep filters ON → fewer but cleaner signals.
  
• Aggressive: threshold 60, disable trend filter, cooldown 5 → more signals, more risk.
  

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Quality Filter Settings

• Enable Trend Filter (EMA): ON (default) — blocks counter-trend signals
  
• Trend EMA Period: 200
  
• Enable Candle Bias Analysis: ON (default)
  
• Candle Bias Lookback: 10 bars
  
• Signal Cooldown: 10 bars
  

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Other Configurable Parameters

• Analysis Period: 50 bars
  
• Signal Threshold: 70
  
• BB Period / Multiplier: 20 / 2.0
  
• ATR Period: 14
  
• Volume Average Period: 20
  
• S/R Tolerance: 0.5%
  
• Minimum Tests: 2
  
• Momentum Lookback: 10 bars
  

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Alerts
Three independent conditions:

1. Confirmed Bullish Breakout — score ≥ threshold + bullish bias + all filters pass
   
2. Confirmed Bearish Breakout — score ≥ threshold + bearish bias + all filters pass
   
3. Extreme Score (≥90) — score hits 90+ regardless of direction/filters (rare compression event)
   

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What’s New in v4 (vs v3)

• Trend Filter (EMA 200): v3 = No → v4 = Yes (optional, default ON)
  
• Candle Close Confirmation: v3 = No → v4 = Yes (always active)
  
• Candle Bias Analysis: v3 = No → v4 = Yes (optional, default ON)
  
• Signal Cooldown: v3 = No → v4 = Yes (default 10)
  
• Direction Factors: v3 = 3 → v4 = 4
  
• Filter Status in Panel: v3 = No → v4 = Yes
  
• Signal Reliability: v3 = Baseline → v4 = improved via filtering
  

The core probability engine is unchanged; v4 adds quality control on top of v3’s foundation — same detection, better filtering.

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Important Notes

• Does not repaint. Uses confirmed bar data only.
  
• Score is contextual probability, not a guarantee — manage risk.
  
• Works on any timeframe / asset class (stocks, forex, crypto, commodities).
  
• Best used with your own S/R mapping: indicator suggests when a level is likely to break and which way; your plan decides if the trade is valid.
  
• Filters reduce false signals — they cannot eliminate them.
  

Developed by Rider Algo