Rounding top breakdown event
Rare breakdown marker: price closes under its 20-bar low one bar after a squeeze turns down.
Two conditions must hold on the same bar: the exponential average of closes is falling, and the Bollinger band width, as a share of price, has narrowed for exactly 10 bars in a row. That bar starts a setup, marked only on its first bar, so a long run gives one chance. The marker prints when the next bar closes below the lowest low of the 20 bars before it. The highs input is never read, so 'rounding top' is a loose name for a falling average and a squeeze.
How to read it
- Markers sit on the candles, one per event. There are almost none: about 10 in a month of SPY one-minute bars at defaults.
- A marker means a squeeze has turned down and the very next bar broke below the recent range low.
- The bar before the marker is where the falling average and the squeeze lined up. Look there for the setup.
What it outputs
- Breakdown
- Marks the bar where a squeeze setup is followed by a close under the lowest low of the prior 20 bars.
When it fires
Fires on the bar right after a setup starts, when the close is under the lowest low of the prior 20 bars. At defaults a setup starts where the falling average and the 10-bar squeeze line up. Meaning: a squeeze has turned down and price has broken its recent range.
Settings
- ma_window
- Length of the average whose slope must be falling on the setup bar. Raising it asks for a slower, established downtrend. Lowering it lets short dips satisfy the slope test.
- width_window
- Lookback for both the Bollinger band and the low the close must break. Raising it makes the breakdown undercut an older, deeper range low. Lowering it uses a nearer low that price breaks more easily.
- width_drop_n
- Bars the band width must narrow in a row, counted exactly. Raising it asks for a longer squeeze, and a squeeze running past this count never arms a setup. Lowering it arms setups after shorter squeezes, so markers come more often.
- confirm_days
- Bars the breakdown must hold before it counts. Any value above 1 stops every marker, because the breakdown can only be true on one bar. Keep it at 1.
Pitfalls
- Rare at defaults: about 10 markers in a month of SPY one-minute bars, so most charts show none. The presets were not backtested; count the markers after clicking one.
- The name says rounding top, but the code checks only a falling average and a narrowing band, not a curved top. The highs input is never read.
- Raising confirm_days above 1 silently stops every marker. The breakdown can hold for one bar only, so the confirmation never forms. This is a code bug, not a market filter.