BreakOut PANCA indicator

How the software works

For this analysis we will use the default configuration of the main options the indicator has:
• PeriodBegin: 00:00 hours.
• PeriodEnd: 05:30 hours.
• BoxEnd: 23:00 hours.

When a new period starts at 00h00, platform time, with the value set in the PeriodBegin parameter, the indicator will draw a blue rectangle in the price window, taking the high and low price values available at that time as the top and bottom sides of the rectangle.

The offset values or breakout area are also drawn on the bottom and top of the blue box, plotted in green with values of 10 pips, BoxBreakOut_Offset.

The indicator will adjust the blue box with the high and low price values until it reaches the end of the period, 05H30 platform time, configured in PeriodEnd parameter. After that time, high and low values are fixed and become the new resistance and support levels to breakout from.

Enter long when there has been a breakout at the top of the offset area (light green area).
Enter short when there has been a breakout at the underside of the offset area, (light green area).

A new box will be plotted at the end of the period; 23h00, configured in BoxEnd parameter.

Main adjustable options

NumberOfDays: Number of past days for the graph on the screen. Default (50 days).

PeriodBegin: Origin for taking high and low prices, starting point from the blue box will be drowning. Default (00:00 hours).

PeriodEnd: Value for the end point of the adjusting high and low price process. From this hour/point the blue box will not be changed anymore, and if a new high or low occurs, there could be a possible breakout. Default (0530 hours).

BoxEnd: Blue box graphing end point value. Default (23:00 hours).

BoxBreakOut_Offset: Offset value or probable breakout area. Default (10 pips).

Other configurable options for color settings:

• Area of the main box (blue).
• Breakout Area (Green).
• Price high and low area analysis (red line).

We recommend leaving the default values unchanged.

Our Veredict

It is basically a method for determing support and resistance breakouts.
It would be appropriate to wait for a candle opening above or below either side of the box.
Consider that a false candle breakout may happen.

Experience Needed

This is a graphic indicator simple enough to understand. It is not complicated to use; we just simply have to wait for a breakout above or below the green zone. As such, it requires no special skills in order to use it.

Advantages

It is an indicator easy to read and understand.
It is extremely lightweight, so it will not degrade the PC if it is open on many windows simultaneously.

Disadvantages

It requires the user to permanently watch the platform and thus the market, therefore limiting trading opportunities.

The idea of this TA is to determine immediate previous range and take trading opportunities once the box is broken (with borders acting as support and resistance areas) using as a trigger the breaks above and below that range.  As commented in the settings review, users can determinate the settings for the specific time frame in which the box should be drawn.

Despite the default settings, I will recommend to set the indicator to the first two hours of each session which will tend to be more accurate than taking the daily clock time, and will give trading opportunities for each session in particular thus working better during European and American sessions.

Keep in mind that you need to modify the BoxBreakOut_Offset, to 100 if you are using 5 decimals MT4. If you leave this at 10, it will only consider 1 pip.

Recommended for small time frames, the TA needs a filter as it tends to give false signals. Tested for 30 minutes, a 50 SMA helps to determine trend and price positioning regarding the MA that could be the required filter.

A bullish break will be more accurate if price is above the mentioned moving average, while a bearish one will require price action to be developing under it.

Another possible filter for any time frame could be the Momentum indicator, thus with an exclusion zone of 0.02%. That is, the signals coming from the levels inside that exclusion zone will be considered weak and with high probabilities of failure, while those outside that area will tend to be more reliable.