Mastering False Breakouts: A Guide to the False Breakouts Indicator for MetaTrader 5

Understanding the "False Breakouts" Indicator for MetaTrader 5

Overview

The False Breakouts indicator for MetaTrader 5 is your go-to tool for spotting key trading opportunities. It helps you identify:

Buy Points and Sell Points based on false breakouts of support and resistance levels.
Dynamic support and resistance lines.
Market tops and bottoms.

This indicator efficiently utilizes buffers to display crucial information on your charts, making it a breeze to analyze those tricky false breakout patterns.

Indicator Structure

Key Properties

Indicator Name: FalseBreakouts
Version: 1.00
Display Window: Main chart

Buffers and Plots

This indicator operates using 6 buffers and 6 plots to present data effectively:

Buy Signal:
- Type: DRAW_ARROW (up arrow).
- Color: Blue.
- Width: 5.
Sell Signal:
- Type: DRAW_ARROW (down arrow).
- Color: Red.
- Width: 5.
Support Line:
- Type: DRAW_LINE (solid line).
- Color: Blue.
Resistance Line:
- Type: DRAW_LINE (solid line).
- Color: Red.
Top Indicator:
- Type: DRAW_ARROW (up arrow).
- Color: Blue.
Bottom Indicator:
- Type: DRAW_ARROW (down arrow).
- Color: Red.

Global Variables

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

Main Functions

1. OnInit()

Purpose: Initializes the indicator and sets up the buffers.
Actions:
- Maps the buffers to the plots.
- Initializes empty values for the buffers.
- Defines Buy and Sell arrows.
- Sets arrow displacement on the chart.

2. OnCalculate()

Purpose: Updates buffers with each new tick or candle.
Actions:
- Checks for any new data.
- Initializes buffers if required.
- Identifies tops and bottoms based on price extremes.
- Updates support, resistance, tops, and bottoms.
- Calls functions to determine Buy and Sell signals.

3. IndexNextPoint()

Purpose: Finds the index of the next valid point in a buffer.
Use: Utilized by the IsBuy() and IsSell() functions for reference points.

4. IsBuy()

Purpose: Checks for a Buy signal based on a false breakout of support.
Logic:
1. Verifies if the current price exceeds the support level.
2. Confirms whether a false breakout occurred.
3. Returns true if conditions are satisfied.

5. IsSell()

Purpose: Checks for a Sell signal based on a false breakout of resistance.
Logic:
1. Verifies if the current price is below the resistance level.
2. Confirms whether a false breakout occurred.
3. Returns true if conditions are met.

Operational Logic

Identifying Tops and Bottoms:
- A top is marked when the current candle's high surpasses the highs of neighboring candles.
- A bottom is marked when the current candle's low dips below the lows of neighboring candles.
Updating Support and Resistance:
- The last identified top is set as resistance.
- The last identified bottom is set as support.
Generating Buy and Sell Signals:
- A buy signal is triggered when the price breaks below support and then rebounds above it.
- A sell signal is triggered when the price breaks above resistance and then falls below it.

Example of Use

This indicator can be applied to any chart in MetaTrader 5.
It will show:
- Blue arrows for Buy points.
- Red arrows for Sell points.
- Blue lines for support levels.
- Red lines for resistance levels.
- Additional arrows indicating tops and bottoms.

Final Thoughts

This indicator is perfect for traders focused on false breakouts.
Be sure to test it across various markets and timeframes to gauge its effectiveness.
You can customize it to include sound alerts or notifications whenever a signal is triggered.