RVOL with Breakout Signals

Key Features

• RVOL Line: Displays RVOL as a gray line on the chart. Values above 1 indicate above-average volume; above 2 suggests strong activity.
  
• Horizontal Lines:
  Base Line (light pink dotted at 0): Reference baseline.
  RVOL 1 (gray dashed): Threshold for average volume.
  RVOL 2 (green dashed): Threshold for high volume activity.
  
• Breakout Buy Signals: Pink upward triangles (above the bar) appear when the price closes above the highest high of the past breakout lookback period AND RVOL exceeds the set threshold (default 2). This confirms potential valid breakouts backed by volume.
  

How to Use

1. Add the indicator to your chart.
   
2. Adjust inputs in the settings:
   RVOL Lookback Period (default 10): Number of bars to calculate average volume. For short-term trades (intraday to mid-term), 5-20 works best; test based on your timeframe.
   Breakout Lookback Period (default 20): Bars to check for the previous high. Shorter for aggressive breakouts, longer for stronger confirmations.
   RVOL Threshold for Breakout (default 2.0): Minimum RVOL required to confirm a breakout signal.
   
3. Look for pink triangles as buy signals during breakouts. Combine with your strategy (e.g., support/resistance, trends) for entries.
   
4. For position sizing: Higher RVOL (e.g., >2) allows larger positions due to better liquidity and reward potential.
   

When to Use

• Breakout Plays: Ideal for spotting valid breakouts in volatile stocks. High RVOL confirms the move isn't a fakeout, as volume indicates real interest (e.g., institutional buying).
  
• Short to Mid-Term Trades: Best on 5-min to daily charts for day trading or swings. Use on "In Play" stocks with news, earnings, or catalysts.
  
• Avoid in Low Volume: If RVOL <1, skip or use small positions—low liquidity increases risk.
  
• Inspired by traders like those at SMB Capital, who use RVOL to decide execution and sizing.
  

Example

See the attached screenshot on Bitcoin daily chart, showing multiple valid breakouts marked by pink triangles where price breaks highs with RVOL >2, leading to strong upward moves. This demonstrates how the indicator filters noise and highlights high-probability setups. Always backtest and use risk management!


Let me knows u have any idea to improve the indicator. Thank you all!