The Range Breaker is an indicator that detects bullish and bearish range breakouts. This tool will help you operate range breakouts as a swing or day trader.

It provides buying and sell-shorting signals on the price graphic. It also displays the target prices and the stop losses.

The present manual treats the following sections:

• Installation of the indicator
• Indicator running
• Indicator setting
• Create an alert system
• Backtest & Automated trading

Installation of the indicator

The installation of the indicator on the Prorealtime platform is fast and easy. Here are the installation steps:

1. Download the indicator

You can download the Range Breaker indicator on this page:

https://artificall.com/range-breaker-prorealtime/

2. Run the Prorealtime platform

You must run the Prorealtime platform at your broker. The platform starting can differ depending on your broker.

3. Click on the “Indicator & trading system” icon

You will find the icon at the top of the price graphic windows:

4. Click on “Import”

After you have clicked on the icon, the indicator window will open. You must click on the “Import” icon to import the indicator:

5. Select the Range Breaker indicator

After you click “import”, a browser window will open. This window will propose you choose the file you want to install on your platform.

You must browse your computer until you reach the indicator’s directory. You have to select the “RANGE.BREAKER.itf” file and click on “Import”:

The Range Breaker is installed on your platform now. You can start to use it 😊

Indicator running

You can use the indicator on any asset, like a stock, a future, a CFD index, or an ETF. You have to follow the steps below to run the indicator:

1. Open the price window on an asset

You must open the price window of the asset on which you want to run the Range Breaker indicator. You must click on the asset of your choice on one of your lists to open the chart.

2. Click on the “Price” icon

The Range Breaker indicator will print information on the price chart. As a consequence, you must run it in graphic mode. For this reason, you must click on the “Price” icon at the top left of the price windows:

3. Click on “Add an indicator”

A list will appear after you click on the “Price” icon. Click on “Add an Indicator”.

4. Type “Range Breaker” in the search bar

After you click on “Add an Indicator” on the list, a window will open.

• Start typing “RANGE.BREAKER” in the search bar at the top right of the window.
• Then click the “RANGE.BREAKER” indicator to run it on the price chart.

Indicator setting

Access the control panel

You will need to click on the tab under the name of the indicator at the top of the price window to access the control panel:

Structure of the control panel

The control panel comprises checkboxes and input fields allowing option activations and parameter settings. It is composed of two blocs:

• The first bloc allows setting the indicator. You can activate the buying or selling signals, customize the target and the stoploss, and adjust the sensibility of the signals.
• The second bloc allows for the data displaying management on the chart price.

I will show you how to better adapt the indicator to your needs.

Activation of the bullish or bearish signals

The Range Breaker indicator provides bullish and bearish signals. The “Bullish Breakout” signal returns bullish breakouts, and the “Bearish Breakout” signal returns bearish breakouts.

• A bullish breakout happens when the price closes above the range’s resistance. That prefigures a bull market. This signal allows a long entry opening.
• A bearish breakout happens when the price closes under the range’s support. That prefigures a bear market. This signal allows a short entry opening.

The “Bullish Breakout” signal will show the bullish breakouts of the ranges, and the “Bearish Breakout” signal will show the bearish breakout of the ranges. You have to check the corresponding checkbox to active one of the other signals:

Range length

You can define the length of the range you want to operate the breakouts. The default value is 100. That means the indicator will detect the ranges on 100 candles:

Range Extension

The indicator uses the length in range detections. However, we cannot know the exact range size when it will be broken.

The range extension parameter allows expansion of the range. The indicator will use the extended length to detect breakouts. A little vertical segment to separate two areas:

By default, the range is extended one time:

With the previous setting, the indicator will detect a range of hundred candles. The breakouts will be detected in the following fifty, for a total of 150 candles.

Range height

You can set the minimum and maximum height of the range that the indicator will recognize. These heights are defined in percentage of the context. The context corresponds to the difference between the highest and lowest candle on a period equal to three times the range length:

Breakout validation

A breakout is validated when the price follows the breakout direction. A bullish breakout is validated when the next candle closes above the top line of the range. A bearish breakout is validated when the next candle closes under the bottom line of the range.

You can activate the breakout validation by clicking the “Validated Breakout” checkbox. The indicator will only return the validated bullish and bearish breakouts:

Volume increase

One of the best ways to eliminate false range breakouts is to only keep signals along with volume increasing. The indicator allows you to filter the breakout signals by volume increasing. You can click on the “Volume Increases” checkbox to activate this filter:

Trend filter

The range breakout strategy allows you to take advantage of the trend continuation. Trade in the trend will increase your success rate and the expected gains by entry. A validated range breakup with high volumes in a positive trend can be the start of a new long-term bullish cycle. It is essential to check the long-term trend of the asset you watch.

The following chart shows the growth potential of a range breakup in a bull market:

The Range Breaker indicator allows filter range detections depending on the trend. You simply have to check the “Positive Trend” checkbox to activate the uptrend filter or the “Negative Trend” checkbox to activate the downtrend filter:

Target prices

The indicator evaluates the target prices from the range height. You can print several target prices on the chart. The first four targets are half-range height. The following targets are equal to the range height. By default, the indicator shows the three first target prices:

Stop loss

The indicator evaluates the stop loss from the range height. The first fourth stop losses are ¼ of the range height. The following are half of the range height. By default, the indicator shows the third stop loss price:

Starting year

You can set the starting year from which the indicator will begin to search ranges. That allows to reduce the time calculation of the indicator:

Font size

You can set the font size of the targets and stop-losses with the “Font Size” parameter:

Display the data on the chart

You can activate or inactivate data to display on the price chart using the “Return Data” option. If you check this box, the indicator will return data as signals, target, and stop loss:

You must check this option to use the indicator to create alerts. I will show you how to do so in the “Create an alert system” chapter.

Create an alert system

The Prorealtime platform provides a trading alert system. The Range Breaker indicator can create bullish and bearish breakout alerts.

Steps of the trading alert creation

Here are the steps you have to follow to implement an alert from the Range Breaker indicator:

1. Configure the indicator

The first step is to set the Range Breaker indicator. Based on the indicator configuration, the Prorealtime platform will build an alert.

For example, if you have defined a range of 50 candles and activated the Breakout validation and volume increase, the platform will only send alerts for this set.

2. Open the alert windows

You need to open the alert windows to create an alert. You must process a right-click on the price chart and click “Create a new alert.” :

3. Select the Range Breaker indicator

Vous must select the Range Breaker indicator to allow the Prorealtime alert system to use the indicator signals:

4. Set the values

The Range Breaker indicator returns 1 in case of bullish breakouts and -1 in case of bearish breakouts. If you want the system to trig a bullish breakout alert, you must select the “equal” operator and set 1 to the value:

5. Manage the triggers

The trigger area allows you to select the temporality of the alerts. In the following example, the platform will send one alert by day in case of bullish breakout:

Backtest & Automated trading

You can integrate the Range Breaker indicator in a backtest or use it in an automated trading system. The new version of the indicator returns all the data you need to create a strategy.

Indicator integration in a backtest

The CALL instruction

The CALL instruction allows indicator integration in a backtest:

myBreakout, myTargetLong, myStoplossLong, myTargetShort, myStoplossShort, myHeight, myTrend = CALL "RANGE.BREAKER"[1, 0, 100, 5, 20, 50, 1, 1, 1, 0, 4, 3, 2015, 18, 0](close)

Function insertion

You can call an indicator in your source code thanks to the function insertion tool. You have to click on the “function insertion” button on the code editor window:

Then type “range breaker”, select the indicator, and click on “Add”:

The indicator will be integrated into the source code with its default setting.

Source code of a backtest

I have included the code for a backtest implementing the Range Breaker. This will help you integrate the indicator into your strategy.

The following code will open long and short entries on the 100-candle range breakouts:

DEFPARAM CUMULATEORDERS = False
//--------------------------------------------------------//
// *** SETTING BLOCK *** //
//--------------------------------------------------------//
// Capital to invest
ONCE CapitalToInvest = 10000
// Position Size
NumberOfContracts = ROUND(CapitalToInvest / Close, 2)
// Type of Breakout. Values: 1 to activate; 0 to inactivate
ONCE BullishBreakout = 1
ONCE BearishBreakout = 0
// Length of the range. Best values: 50; 100; 200
ONCE RangeLength = 200
// Extension of the Range
ONCE RangeExtension = 5
// Min range height (%)
ONCE HeightMin = 20
// Max range height (%)
ONCE HeightMax = 50
// Breakout conditions. Values: 1 to activate; 0 to inactivate
ONCE ValidatedBreakout = 1
ONCE VolumeIncreases = 0
// Trend Filter
ONCE PositiveTrend = 0
ONCE NegativeTrend = 0
// Target and Stoploss levels
ONCE TargetLevel = 10
ONCE StoplossLevel = 4
// Starting Year
ONCE StartingYear = 2000
// Font Size
ONCE FontSize = 12
// Return target and stoploss. Values: 1 to activate; 0 to inactivate
ONCE ReturnData = 1
//--------------------------------------------------------//


// * INITIALIZATION OF THE VARIABLES * //
myBreakout = 0
myTargetLong = 0
myStoplossLong = 0
myTargetShort = 0
myStoplossShort = 0
myHeight = 0
myTrend = 0

// *** IMPORT OF THE RANGE BREAKER INDICATOR *** //
myBreakout, myTargetLong, myStoplossLong, myTargetShort, myStoplossShort, myHeight, myTrend = CALL "RANGE.BREAKER"[BullishBreakout, BearishBreakout, RangeLength, RangeExtension, HeightMin, HeightMax, ValidatedBreakout, VolumeIncreases, PositiveTrend, NegativeTrend, TargetLevel, StoplossLevel, StartingYear, FontSize, ReturnData](close)


// *** LONG POSITION OPENING *** //
// NOT OnMarket AND
IF NOT OnMarket AND myBreakout=1 THEN
  BUY NumberOfContracts CONTRACTS AT MARKET
  Set Target Price myTargetLong
  Set Stop Price myStoplossLong
ENDIF

// *** SHORT POSITION OPENING *** //
IF NOT OnMarket AND myBreakout=-1 THEN
  SELLSHORT NumberOfContracts CONTRACTS AT MARKET
  Set Target Price myTargetShort
  Set Stop Price myStoplossShort
ENDIF

Backtest setting

Here is how to configure the parameters of the Range Breaker indicator.

Type of breakouts

The BullishBreakout and BearishBreakout variables will allow activation and inactivation of bullish and bearish breakouts. You must set 1 to activate a type of breakout and 0 to inactivate it :

ONCE BullishBreakout = 1
ONCE BearishBreakout = 1

Length of the range

The RangeLength variable allows us to define the length of the range. In this example, the length of the range is 100 candles:

ONCE RangeLength = 100

Extension of the range

You can extend the range length to increase the breakout detections. If you set 5, the range length will be extended once. The indicator will detect breakouts from 100 to 150 candles. If you put two, the length will be extended one-half times. You can set decimal values. In this example, the range will be extended one time:

ONCE RangeExtension = 1

Height of the range

You can set the minimum and maximum height of the range that the indicator will recognize. These heights are defined in percentage of the context. The context corresponds to the difference between the highest and lowest candle on a period equal to three times the range length:

// Min range height (%)
ONCE HeightMin = 20
// Max range height (%)
ONCE HeightMax = 50

Validation of the breakout

You can filter the validated range breakouts. You must set 1 to validate the breakout and 0 else. In this example, the breakouts will be validated:

ONCE ValidatedBreakout = 1

Volume increases

You can filter the breakouts along with volume increases. You must set 1 to activate the volume increases filter and 0 else:

ONCE VolumeIncreases = 1

Trend filter

You can apply a trend filter to the range detection with the “Positive Trend” and “Negative Trend” options. If you check one of these options, the indicator will only detect ranges in the selected trend:

// Trend Filter
ONCE PositiveTrend = 1
ONCE NegativeTrend = 0

Target and stoploss

You can define the target and stoploss levels. That will determine their values for the long and sell-short signals. In this example, the target level is 5, and the stoploss level is 4:

ONCE TargetLevel = 5
ONCE StoplossLevel = 4

Starting year

You can set the starting year of the indicator to reduce the time calculation:

// Starting Year
ONCE StartingYear = 2016

Font size

This option will define the font size to display the targets and stoploss. It is only helpful to the indicator. You can keep the default values:

// Font Size
ONCE FontSize = 12

Return of the data

The activation of this option allows the indicator to return the data as signals, targets, and stoploss. You must keep 1 to this option in a backtest or automated strategy:

ONCE ReturnData = 1

Returned variables by the indicator

The Range Breaker indicator returns the six following variables:

Backtest example

Here is an example of a backtest run on the Technologie Select Sector SPDR ETF (XLK) in a 15-minute time unit from 2018 à 2024: