Higher-High and Lower-Low Breakouts with a False-Break Filter
Summary
This breakout strategy compares the selected price with the prior highest high and lowest low over a configurable lookback. It signals a long when price exceeds the previous range high and a short when price falls below the previous range low. A second, shorter lookback supplies a safety confirmation intended to filter some false breakouts: the prior range extreme must also sit beyond a lagged guard high or low before an entry is allowed.
The script opens positions in the breakout direction and exposes the main lookback and guard settings. The publication recommends finding separate entry and exit indicators and cautions that Heiken Ashi bars are averaged, so backtests on them do not represent true prices; it describes regular candles and line charts as more realistic. Although the page mentions chart examples and settings, it provides no quantified results, transaction-cost analysis, or standalone exit rules. The safety check is presented as an attempt to reduce false signals, not as evidence that they are eliminated.
Key ideas
- A long signal occurs when price breaks above the prior highest high in the selected lookback window.
- A short signal occurs when price breaks below the prior lowest low in the selected lookback window.
- A separate guard lookback adds confirmation intended to filter potential false breakouts.
- The author recommends finding additional tools for entries and exits because the script chiefly defines entry conditions.
- Averaged Heiken Ashi bars can make backtests misleading, and the publication gives no quantified results.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.