Market Structure (Breakers) [LuxAlgo]

7 nov 2023

The Market Structure (Breakers) indicator aims to detect "Breaker Market Structures", an original concept inspired by breaker blocks, and extend on the original concept of market structures by extending existing MS levels, providing supports/resistances as a result.

Various graphical elements are included that highlight the interactions between price and Breaker structures.

🔶 USAGE



Breaker structures occur when a market structure is confirmed (price breaking a previous swing level). The broken swing point is extended by a dotted line which can be used as potential support or resistance.



After a market structure, the price can eventually reverse and break one or multiple breaker structures at the same time, allowing for the detection of new trends in the price.

A market structure closer to the top/bottom of a trend can return Breaker structures breakouts more indicative of potential reversals.

Breakers MS breakouts can also be useful as exits for entries done using market market structures.



The script additionally highlights support/resistance events by highlighting candle borders, with a border using a green color indicating support events while a red color is indicative of a resistance event.

🔹Breaker Structure Lifespan

The "lifespan" of Breaker structures, that is the amount of time the script will extend/evaluate them is determined by various user settings.



The Maximum Breaks setting determines the maximum amount of breaks a breaker structure can withstand before it is broken.

For example, a maximum amount of breaks of 3 for a bearish breaker structure would require the price to cross under that precise breaker structure level three times. Using higher values of this setting will also highlight more Breakers MS.

The Breaker Maximum Duration setting on the other hand determines how many bars a breaker structure can be evaluated without being broken. If a breaker structure is not broken after this amount of bars then it will stop being evaluated and will be removed.

🔶 SETTINGS

• Swings Period: Period used for the swing detection, with higher values returning longer term markter structures.
  
• Maximum Breaks: Amount of break required for a breaker block to be considered broken.
  
• Breaker Maximum Duration: Maximum duration of a breaker block (in bars).