Indicator documentation "FakeBreaks.mq5"

**
**

**

**

Overview

The "False Breakouts.mq5" indicator is designed to identify and mark on the chart:

  1. Buy Points and Sell Points based on false breakouts of support and resistance.
  2. Dynamicsupport and resistance****levels.
  3. Markettops and bottoms.

It uses buffers to store and display this information on the chart, making it easier to visually analyse false breakout patterns.

Code Structure

Indicator Properties

  • Indicator Name: FalseBreakouts.mq5
  • Version: 1.00
  • Display Window: Main chart ( indicator_chart_window ).

Buffers and Plots

The indicator uses 6 buffers to store data and 6 plots to display it on the chart:

  1. Buy:
    • Type: DRAW_ARROW (up arrow).
    • Colour: Blue (clrBlue).
    • Width: 5.
  2. Sell:
    • Type: DRAW_ARROW (down arrow).
    • Colour: Red ( clrRed ).
    • Width: 5.
  3. Support:
    • Type: DRAW_LINE (solid line).
    • Colour: Blue (clrBlue).
  4. Resistance:
    • Type: DRAW_LINE (continuous line).
    • Colour: Red ( clrRed ).
  5. Bottom:
    • Type: DRAW_ARROW (down arrow).
    • Colour: Red ( clrRed ).
  6. Top:
    • Type: DRAW_ARROW (up arrow).
    • Colour: Blue ( clrBlue ).

Global Variables

  • ExtResistancesBuffer[] : Stores the resistance levels.
  • ExtSupportsBuffer[] : Stores the support levels.
  • ExtTopsBuffer[] : Stores identified tops.
  • ExtBottomsBuffer[] : Stores identified bottoms.
  • ExtSellBuffer[] : Stores the selling points.
  • ExtBuyBuffer[] : Stores the buy points.

Main functions

1. OnInit()

  • Purpose: Initialises the indicator and maps the buffers.
  • Actions:
    • Maps the buffers to the plots.
    • Sets empty values ( PLOT_EMPTY_VALUE ) for the buffers.
    • Sets the arrows (icons) for Buy and Sell.
    • Defines the displacement of the arrows on the graph.

2. OnCalculate()

  • Purpose: Calculates and updates the buffers with each new candle or tick.
  • Actions:
    • Checks for new data to process.
    • Initialises the buffers if necessary.
    • Identifies tops ( IS_TOP ) and bottoms ( IS_BOTTOM ) based on the high and low prices.
    • Updates the resistance, support, top and bottom buffers.
    • Calls the IsBuy() and IsSell() functions to identify buy and sell points.

3. IndexNextPoint()

  • Purpose: Finds the index of the next valid (non-zero) point in a buffer.
  • Use: Used by the IsBuy() and IsSell() functions to identify the most recent reference point.

4. IsBuy()

  • Purpose: Checks for a buy signal based on a false break of support.
  • Logic:
    1. Checks whether the current price is above the reference point (support).
    2. Confirms if there has been a false breakout (price falls below and then returns above support).
    3. Returns true if the conditions are met.

5. IsSell()

  • Purpose: Checks for a sell signal based on a false breakout of resistance.
  • Logic:
    1. Checks whether the current price is below the reference point (resistance).
    2. Confirms if there has been a false breakout (price rises above and then returns below resistance).
    3. Returns true if the conditions are met.

Operating Logic

  1. Identification of Tops and Bottoms:

    • A top is identified when the high of the current candle is higher than the highs of the adjacent candles.
    • A bottom is identified when the low of the current candle is lower than the lows of the adjacent candles.

  2. Updating Support and Resistance:

    • The last identified top is stored as resistance.
    • The last identified bottom is stored as support.

  3. Buy and Sell Signals:

    • A buy signal is generated when the price breaks through a support and then returns above it.
    • A sell signal is generated when the price breaks through resistance and then returns below it.

Example of use

  • The indicator can be applied to any chart in MetaTrader 5.
  • It will display:
    • Blue arrows for buy points.
    • Red arrows for sell points.
    • Blue lines for support.
    • Red lines for resistances.
    • Additional arrows for tops and bottoms.

Final considerations

  • The indicator is useful for traders who trade on the basis of false breakouts of support and resistance.
  • It is recommended to test the indicator on different markets and timeframes to validate its effectiveness.
  • It can be customised to include sound alerts or notifications when a signal is generated.