OPEN-SOURCE SCRIPT
Heiken Ashi Break of Structure with Market Structure [by Hampeh]
Description
This indicator is designed to identify high-probability trading entries by combining the trend-smoothing capabilities of Heiken Ashi candles with the powerful concept of a Break of Structure (BOS).
To enhance signal quality and reduce false signals, it incorporates a mandatory market structure confirmation filter, requiring a Higher Low (HL) to be established before a buy signal and a Lower High (LH) before a sell signal. The indicator automatically provides dynamic Stop Loss levels and generates real-time alerts to streamline the trading process.
How It Works
The indicator's logic is built upon several key components that work together to filter for high-quality setups.
1. Heiken Ashi Foundation The script uses Heiken Ashi candles as its foundation to reduce market noise and provide a clearer visualization of the underlying trend. This smoothing effect makes it easier to identify sustained directional moves.
2. Break of Structure (BOS) Identification The core entry trigger is a Break of Structure, defined as:
Bullish BOS (Buy Signal): The indicator first identifies a downtrend phase (red Heiken Ashi candles). It marks the opening price of this phase (redOpen). A buy signal is triggered when the trend reverses (turns green) and the Heiken Ashi close price breaks above this redOpen level.
Bearish BOS (Sell Signal): Conversely, it identifies an uptrend phase (green Heiken Ashi candles) and marks its opening price (greenOpen). A sell signal is triggered when the trend reverses (turns red) and the Heiken Ashi close price breaks below this greenOpen level.
3. Market Structure Confirmation (HL/LH Filter) This is the key filter that validates the strength of a potential new trend:
Higher Low (HL) for Buys: A buy signal is only considered valid if the low point of the most recent downtrend phase is higher than the low point of the previous downtrend phase. This confirms a classic "Higher Low" market structure, indicating that buying pressure is increasing.
Lower High (LH) for Sells: A sell signal is only considered valid if the high point of the most recent uptrend phase is lower than the high point of the previous uptrend phase. This confirms a "Lower High" structure, suggesting that selling pressure is building.
4. Dynamic Stop Loss Calculation The indicator provides a logical and dynamic Stop Loss for every signal:
For Buy Signals: The Stop Loss is automatically placed just below the lowest low (lowestLow) recorded during the entire preceding downtrend (red candle) phase.
For Sell Signals: The Stop Loss is placed just above the highest high (highestHigh) recorded during the entire preceding uptrend (green candle) phase.
5. Signal Generation and Visualization
A final BUY signal is generated only when all conditions are met: a bullish BOS occurs and it is preceded by a confirmed Higher Low.
A final SELL signal is generated only when all conditions are met: a bearish BOS occurs and it is preceded by a confirmed Lower High.
When a valid signal is triggered, a label appears on the chart displaying the entry price and the calculated Stop Loss. A corresponding alert is also fired with detailed trade information.
Summary of Strategy
In essence, this indicator waits for a pullback (a Heiken Ashi color change), confirms that the pullback respects bullish or bearish market structure (HL or LH), and then triggers an entry upon a Break of Structure in the intended direction.
Disclaimer: This indicator is a tool for technical analysis and does not guarantee profits. Trading financial markets involves significant risk. Always conduct your own research and practice proper risk management.
This indicator is designed to identify high-probability trading entries by combining the trend-smoothing capabilities of Heiken Ashi candles with the powerful concept of a Break of Structure (BOS).
To enhance signal quality and reduce false signals, it incorporates a mandatory market structure confirmation filter, requiring a Higher Low (HL) to be established before a buy signal and a Lower High (LH) before a sell signal. The indicator automatically provides dynamic Stop Loss levels and generates real-time alerts to streamline the trading process.
How It Works
The indicator's logic is built upon several key components that work together to filter for high-quality setups.
1. Heiken Ashi Foundation The script uses Heiken Ashi candles as its foundation to reduce market noise and provide a clearer visualization of the underlying trend. This smoothing effect makes it easier to identify sustained directional moves.
2. Break of Structure (BOS) Identification The core entry trigger is a Break of Structure, defined as:
Bullish BOS (Buy Signal): The indicator first identifies a downtrend phase (red Heiken Ashi candles). It marks the opening price of this phase (redOpen). A buy signal is triggered when the trend reverses (turns green) and the Heiken Ashi close price breaks above this redOpen level.
Bearish BOS (Sell Signal): Conversely, it identifies an uptrend phase (green Heiken Ashi candles) and marks its opening price (greenOpen). A sell signal is triggered when the trend reverses (turns red) and the Heiken Ashi close price breaks below this greenOpen level.
3. Market Structure Confirmation (HL/LH Filter) This is the key filter that validates the strength of a potential new trend:
Higher Low (HL) for Buys: A buy signal is only considered valid if the low point of the most recent downtrend phase is higher than the low point of the previous downtrend phase. This confirms a classic "Higher Low" market structure, indicating that buying pressure is increasing.
Lower High (LH) for Sells: A sell signal is only considered valid if the high point of the most recent uptrend phase is lower than the high point of the previous uptrend phase. This confirms a "Lower High" structure, suggesting that selling pressure is building.
4. Dynamic Stop Loss Calculation The indicator provides a logical and dynamic Stop Loss for every signal:
For Buy Signals: The Stop Loss is automatically placed just below the lowest low (lowestLow) recorded during the entire preceding downtrend (red candle) phase.
For Sell Signals: The Stop Loss is placed just above the highest high (highestHigh) recorded during the entire preceding uptrend (green candle) phase.
5. Signal Generation and Visualization
A final BUY signal is generated only when all conditions are met: a bullish BOS occurs and it is preceded by a confirmed Higher Low.
A final SELL signal is generated only when all conditions are met: a bearish BOS occurs and it is preceded by a confirmed Lower High.
When a valid signal is triggered, a label appears on the chart displaying the entry price and the calculated Stop Loss. A corresponding alert is also fired with detailed trade information.
Summary of Strategy
In essence, this indicator waits for a pullback (a Heiken Ashi color change), confirms that the pullback respects bullish or bearish market structure (HL or LH), and then triggers an entry upon a Break of Structure in the intended direction.
Disclaimer: This indicator is a tool for technical analysis and does not guarantee profits. Trading financial markets involves significant risk. Always conduct your own research and practice proper risk management.
Mã nguồn mở
Theo đúng tinh thần TradingView, tác giả của tập lệnh này đã công bố nó dưới dạng mã nguồn mở, để các nhà giao dịch có thể xem xét và xác minh chức năng. Chúc mừng tác giả! Mặc dù bạn có thể sử dụng miễn phí, hãy nhớ rằng việc công bố lại mã phải tuân theo Nội quy.
Thông báo miễn trừ trách nhiệm
Thông tin và các ấn phẩm này không nhằm mục đích, và không cấu thành, lời khuyên hoặc khuyến nghị về tài chính, đầu tư, giao dịch hay các loại khác do TradingView cung cấp hoặc xác nhận. Đọc thêm tại Điều khoản Sử dụng.
Mã nguồn mở
Theo đúng tinh thần TradingView, tác giả của tập lệnh này đã công bố nó dưới dạng mã nguồn mở, để các nhà giao dịch có thể xem xét và xác minh chức năng. Chúc mừng tác giả! Mặc dù bạn có thể sử dụng miễn phí, hãy nhớ rằng việc công bố lại mã phải tuân theo Nội quy.
Thông báo miễn trừ trách nhiệm
Thông tin và các ấn phẩm này không nhằm mục đích, và không cấu thành, lời khuyên hoặc khuyến nghị về tài chính, đầu tư, giao dịch hay các loại khác do TradingView cung cấp hoặc xác nhận. Đọc thêm tại Điều khoản Sử dụng.