Rob Booker - Breakout: (Directly taken from the official Tradingview V1 version of the script)
Rob Booker’s ( ) Breakout is a trend strength indicator that affirms the belief that trading in the direction of a trend and continuing to follow its pull is more profitable for traders, while simultaneously reducing risk.
was traditionally used and developed to determine a price’s trend strength. It is commonly known as a tool from the arsenal of Rob Booker, experienced entrepreneur and currency trader.
Calculations for the Breakout indicator are based on a moving average of price range expansion over a specific period of time. By default, the setting rests at 14 bars, this however is not mandatory, as other periods are routinely used for analysis as well.
The line is used to measure and determine the strength of a trend, and so the direction of this line and its interpretation are crucial in a trader’s analysis. As the line rises, a trend increases in strength and price moves in the trend’s direction. Similarly, if the line is falling, a trend decreases in strength and price then enters a period of consolidation, or retracement.
Traditionally, the is plotted on the chart as a single line that consists of values that range from 0-100. The line is non-directional, meaning that it always measures trend strength regardless of the position of a price’s trend (up or down). Essentially, quantifies trend strength by presenting in both uptrends and downtrends of the line.
What to look for
The values associated with the line help traders determine the most profitable trades and where risk lies in the current trend. It is important to know how to quantify trend strength and distinguish between the varying values in order to understand the differences in trending vs. non-trending conditions. Let’s take a look at values and what they mean for trend strength.
0-25: Signifies an absent of weak trend
25-50: Signifies a strong trend
50-75: Signifies a very strong trend
75-100: Signifies an extremely strong trend
To delve into this a bit further, let’s assess the meaning of if it is valued below 25. If the line remains below 25 for more than 30 or so bars, price then enters range conditions, making price patterns more distinguishable and visible to traders. Price will move up and down between resistance and support in order to determine selling and buying interest and may then eventually break out into a trend or pattern.
The way in which peaks, ebs , and flows is also a signifier of its overall pattern and trend momentum. The line can clearly indicate to the trader when trend strength is strong versus when it is weak. When peaks are pictured as higher, it points towards an increase in trend momentum. If peaks are pictured as lower - you guessed it - it points towards a decrease in trend momentum. A trend of lower peaks could be a warning for traders to watch prices and manage and assess risk before a trade gets out of hand. Similarly, whenever there is a sudden move that seems out of place or a change in trend character that goes against what you’ve seen before, this should be a clear sign to watch prices and assess risk.
The Breakout indicator is a trend strength indicator that analyzes price movements relative to trend strength to signal a user when is best for a trade and when is best to manage risk and assess patterns. As long as a trader recognizes strong trends and assesses the risk of each trade properly, they should have no problem using this indicator and utilizing it to work in their favor. In addition, the helps identify trending conditions, but while doing so, also aids traders in finding strong trends to trade. The indicator can even alert traders to specific changes in trend momentum, allowing them to be primed for risk management.
Dans le véritable esprit de TradingView, l'auteur de ce script l'a publié en open-source, afin que les traders puissent le comprendre et le vérifier. Bravo à l'auteur! Vous pouvez l'utiliser gratuitement, mais la réutilisation de ce code dans une publication est régie par le règlement. Vous pouvez le mettre en favori pour l'utiliser sur un graphique.
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