Pivot Trend Breakout Signals from Averaged Pivot Highs and Lows

Summary

This indicator describes a breakout-oriented trend signal built from recent pivot highs and lows. It identifies pivot points using a configurable period that checks bars on both sides of a candidate turning point, then compares the current close with a selected number of pivot levels. The resulting relative differences are averaged separately for highs and lows. When both averages are above zero, the indicator marks an upward state; when both are below zero, it marks a downward state. It also plots a smoothed midpoint to show changes in the combined signal.

The example uses a pivot period of four bars and includes three pivot points, with a nine-period average for the midpoint. These are settings in the provided indicator, not tested optimal values. The document explains the construction but offers no backtest, trading rules for entries and exits, risk controls, or performance evidence. Pivot points require later bars for confirmation, so signals may be delayed; the code’s handling of stored levels and averaging should also be checked before use.

Key ideas

• The indicator locates pivot highs and lows using a configurable lookback on both sides of each candidate bar.
• It averages relative close-to-pivot differences separately for pivot highs and pivot lows.
• A positive reading for both averages signals an upward trend state, while two negative readings signal a downward state.
• A smoothed midpoint combines the two readings and is colored according to its level and direction.
• The example settings are illustrative, and the document provides no backtest or risk-management method.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.