Diamond breakout down event
Marks a close below the recent low on the bar a narrowing diamond range is confirmed; silent at default settings.
A diamond is a range that first widens for broad_hold bars, then narrows for contract_hold bars, with rising lows and falling highs. On the bar the narrowing is confirmed, the indicator signals if the close is under the lowest low of the last 100 bars, shifted by band. That low already includes the current close, so a band of zero can never pass; only a negative band makes it fire.
How to read it
- Markers sit on the price candles, one per signal, on the candle where the narrowing is confirmed.
- A marker means the range widened, then narrowed, and this candle closed under the recent low plus the band offset.
- At default settings there are no markers, so set band below zero before reading the chart.
- Further falls after a marker add no new marker until another diamond forms.
What it outputs
- Breakdown
- A marker on the candle where a narrowing range is confirmed and the close sits below the recent low.
When it fires
Fires once, on the bar a range that widened then narrowed is confirmed, if the close is below the 100-bar low shifted by band. Read it as the squeeze breaking down on that bar, not as a later drop.
Settings
- broad_hold
- Bars the range must widen before the narrowing phase can count. Raising it needs a longer expansion first, so fewer diamonds form. Lowering it to 1 accepts short bursts of widening.
- contract_hold
- Bars the range must keep narrowing before the signal can fire. Raising it waits for a longer squeeze, so signals come later and less often. Lowering it fires on shorter squeezes.
- band
- Offset of the break line from the recent low. Zero or positive values never fire. Negative values such as -0.002 let the close sit 0.2 percent above the low and still count; -1 counts almost any close.
- confirm_days
- Consecutive bars the break must hold. Keep it at 1: the signal is a one-bar pulse, so any value above 1 never fires. Despite the name, it counts bars, not days.
Pitfalls
- A zero or positive band can never fire, since the 100-bar low includes the current close. Zero events on a month of SPY one-minute bars is structural, not a quiet market.
- The break must land on the same bar the narrowing is confirmed. A close below the low one bar earlier or later does not count, so signals are rare even with a negative band.
- The broadening and narrowing tests use fixed 0.05 percent slope thresholds over 20 bars on a 100-bar window; neither is a setting on this indicator.