Introduction: The Breakout Filter is a technical analysis indicator designed to identify potential breakout trading opportunities in the financial markets. It combines breakout conditions based on price and volume with the visualization of Exponential Moving Average (EMA) lines. This indicator can be a valuable tool for traders seeking to capture breakout movements while utilizing EMA lines for additional trend analysis.
Indicator Overview: The Breakout Filter consists of three main filters: Filter 1, Filter 2, and Filter 3. Each filter has its own set of conditions that need to be met for a breakout signal to be generated. Additionally, the indicator plots EMA lines on the chart to provide further insights into the market trend.
Filter 1 focuses on identifying breakouts based on both price and volume criteria. It considers the following conditions: - Price Breakout: The close price crosses above the Donchian Channel's middle line, indicating a potential upward breakout. - Volume Breakout: The trading volume exceeds the moving average of volume, suggesting increased market participation during the breakout.
When both the price breakout and volume breakout conditions are met, Filter 1 generates a signal indicating a potential breakout in the market. This filter helps traders identify significant price movements accompanied by higher trading volumes.
Filter 2: Upper Band Breakout
Filter 2 specifically looks for breakouts above the upper band of the Donchian Channel. This condition suggests a potential strong upward momentum in the market. When the high price exceeds the upper band, Filter 2 generates a signal, indicating a breakout above the recent price range.
Filter 3: Combined Filter 1 and Filter 2
Filter 3 combines the conditions of both Filter 1 and Filter 2. It requires that both Filter 1 and Filter 2 generate signals simultaneously. When this happens, it indicates a strong breakout signal with price and volume confirming the upward momentum.
EMA Lines: The Breakout Filter with EMA Lines also includes the visualization of Exponential Moving Average (EMA) lines on the chart. EMA is a popular technical indicator used to identify the overall trend in the market. The indicator plots three EMA lines with different periods: EMA1, EMA2, and EMA3. Traders can choose the periods for each EMA line based on their preference and trading strategy.
The EMA lines can provide additional insights into the market trend and potential support or resistance levels. By observing the interaction between the price and the EMA lines, traders can gain a better understanding of the prevailing market sentiment and make informed trading decisions.
How to screen these filters using Trading View Screener
Insert column "DONCHIAN20 UP" and set to "EQUAL HIGH"
Conclusion:
The Breakout Filter with EMA Lines is a comprehensive indicator that combines breakout conditions based on price and volume with the visualization of EMA lines. It helps traders identify potential breakout trading opportunities while providing insights into the market trend. By using this indicator, traders can enhance their trading strategies and potentially improve their trading outcomes.
Please note that this write-up is for informational purposes only and should not be considered as financial advice. Traders should conduct their own analysis and exercise caution when making trading decisions.
Has anyone caught a good breakout with the filter? Any other filters that others use?
hayan500
⋅
I combo with Lorentzian Classification (LC). At DTF, check if any LC's buy signal combo with F3. If LC's buy signal combo with F1 or F2, go to lower TF to check if its combo with F3, then we consider entering long. It's not necessary to happen at the same bar, neighboring bars still valid. TAYOR.
dharmendra10
⋅
not able to find donchain to insert. sorry I got it .really nice working, Appreciable
dharmendra10
⋅
This indicator is one of the greatest in its category. It shows signal very accurately BUT only uptrend. Is there possible to integrate for downside too with same accuracy ?
hayan500
⋅
@dharmendra10, Thank you very much for your comment. It improves me a lot of my long entry. I will try to find a way how to make a short entry too. Sharing is caring :)
dharmendra10
⋅
@hayan500, Great for your affirmation for breakout in down side too ! Quite sure, you will do with much higher accuracy. Thanks for such a facinating trading machine.
justDSingh
⋅
Hi, I copied the code,but how to go about doing-Insert column "DONCHIAN20 UP" and set to "EQUAL HIGH". Where is this to be inserted.Thanks
hayan500
⋅
@justDSingh, 1. Click stock screener you can see many column. Most right of the column you can see 3 dots. Click that dot, from pull down menu search Donchian Channels Upper Band and tick it. Sorry for very bad explanation
Has anyone caught a good breakout with the filter?
Any other filters that others use?