Compression Breakout Block
SETTING MANUAL
1/ What is the Compression Breakout Block indicator?
Introduction:
The Compression Breakout Block Indicator is a volatility-driven market structure tool built to identify price compression zones-areas where volatility contracts and directional moves are likely to follow.
It evaluates price range, candle body size, and indecision patterns over a defined lookback window to pinpoint periods of consolidation.
Once a valid compression block is confirmed, the indicator tracks price behavior around the zone and delivers bullish or bearish breakout signals when momentum expands.
Benefits:
- Early Compression Detection: Identifies low-volatility consolidation phases before explosive price movement begins.
- Precise Breakout Signals: Alerts traders when price exits a compression block with clear directional intent.
- Reduced False Breakouts: Filters weak signals using candle structure and range-based validation.
- Clear Market Structure Visualization: Displays compression zones directly on the chart for fast decision-making.
2/ Indicator Setting - Compression Breakout Block
Core Detection Settings
Lookback Period
Defines how many past candles the indicator analyzes to detect compression behavior.
Use Filter by Doji Candle (On/Off)
Enable this option to require indecision candles (such as doji or small-body candles) inside the range.
This helps confirm true price compression and filters out noisy consolidation.
Range Filter Threshold
Sets the maximum allowed price range within the lookback period to qualify as compression.
- Lower threshold = tighter range, stronger compression
- Higher threshold = looser range, more frequent signals
Signal Display Settings
Bullish Signal Text
Custom text shown on the chart when a bullish breakout occurs (e.g., “Bullish Breakout”).
Bearish Signal Text
Custom text shown on the chart when a bearish breakout occurs (e.g., “Bearish Breakout”).
Bullish Signal on Chart Color
Choose the color for bullish breakout signals to visually confirm upside momentum.
Bearish Signal on Chart Color
Choose the color for bearish breakout signals to highlight downside momentum.
Risk Management (SL & TP)
Stop Loss Line Color
Select the color of the stop loss line plotted on the chart.
Take Profit Label Color
Choose the color of the take profit label for clear visual separation from SL.
SL Detection Distance (Days)
Defines how far back (in days) the indicator searches for swing points to place the stop loss.
Higher values allow SL to anchor to more significant structure levels.
ATR Period for SL Shift
Number of bars used to calculate the Average True Range (ATR), measuring market volatility.
SL Shift Coefficient (from ATR)
Multiplier applied to ATR to determine how far the stop loss is placed from the entry.
- Higher value = wider stop (more room)
- Lower value = tighter stop (higher precision)
TP Coefficient (from SL)
Defines the take profit distance as a multiple of the stop loss, allowing consistent risk-reward ratios.
Alert Control
Show Alerts (On/Off)
Enable or disable alerts when a bullish or bearish breakout is detected.
When enabled, alerts can be configured through TradingView’s alert system.
- How can I set up alerts?
To stay updated on potential trading opportunities, you can set up alerts within the Compression Breakout Block
Step 1:
From the indicator settings, customize your alerts by defining your desired parameters. The selected configurations will be used for notifications in Step 2.
Step 2:To receive notifications through the app, pop-ups, alert emails, Webhook URL, sound alerts, or email-to-SMS, enable these features by clicking on TradingView's “Alert” icon.
Step 3:
In the Condition dropdown, select Compression Breakout Block
Step 4:
Select “Any alert() function call”, then Click on “Notifications”.
Step 5:
You choose the types of notifications you'd like to receive and click the “Create” button.
