Reversal Breakout System

# Reversal Breakout System (RBS)

## Overview
The Reversal Breakout System is a powerful technical analysis tool designed to identify potential reversal points and breakout opportunities in the market. It focuses on inside candle formations across multiple timeframes and meticulously tracks subsequent price action to identify high-probability breakout scenarios.

## Core Functionality

### Inside Candle Detection
The indicator scans for inside candles on your specified higher timeframe (default: 15 min). An inside candle occurs when the current candle's high is lower than the previous candle's high AND the current candle's low is higher than the previous candle's low. These formations often signal market indecision and potential reversal points.

Inside candles are categorised as either:
- **Bullish** (green/teal): When the close is above the open
- **Bearish** (red/purple): When the close is below the open

### Mother-Child Relationship
The indicator establishes a "mother-child" relationship:
- The **mother candle** is the previous candle that fully engulfs the inside candle
- The **child candle** is the inside candle itself

These relationships are visually displayed through coloured boxes that can be customised for both fill and border transparency.

### Breakout Tracking
The system meticulously tracks all mother candle high and low levels until price breaks beyond them. When price closes:
- Above a mother candle high → Registers as a "High Break"
- Below a mother candle low → Registers as a "Low Break"

The indicator maintains detailed statistics on these breakouts, differentiating between bullish and bearish mother candle outcomes.

### Fibonacci Levels
For each inside candle, the indicator can display key internal Fibonacci levels (30%, 50%, 70%) to help identify potential intra-pattern support/resistance areas.

### Range Projection
The indicator can project the mother candle's range both above and below, creating potential target zones for breakout trades.

## Visual Components

- **Boxes**: Mother and inside candle patterns are visualised with customisable boxes
- **Fibonacci Lines**: Internal structure of the pattern is revealed
- **Range Projection Lines**: Potential target zones based on pattern size
- **Statistics Table**: Comprehensive breakdown of pattern occurrences and success rates

## How to Use This Indicator

### For Trend Confirmation
1. Look for inside candles that form in the direction of the prevailing trend
2. Wait for price to break above (in uptrends) or below (in downtrends) the mother candle level
3. Use the projected range as a potential target

### For Reversal Detection
1. Identify inside candles that form after extended moves
2. Monitor for price breaking the mother candle in the opposite direction of the preceding trend
3. Use the statistics table to assess the historical probability of successful breakouts

### For Range Trading
1. Use the mother candle high and low levels as potential support and resistance
2. Consider taking profits at the Fibonacci levels within the pattern
3. Implement tight stops beyond the opposite mother candle boundary

## Practical Tips

- **Timeframe Synergy**: The default setting uses the 1-hour timeframe for pattern detection while operating on your chart's current timeframe. Adjust this based on your trading style.
- **Pattern Visibility**: Use the box fill options to enhance pattern visibility without cluttering your chart.
- **Statistical Edge**: Over time, the statistics table will reveal which types of breakouts are most reliable in the current market conditions.
- **Alert Functionality**: Set alerts for both pattern formation and subsequent breakouts to avoid missing trading opportunities.

## Customisation Options

The indicator offers extensive customisation options, including:

- **Box Appearance**: Toggle fills, adjust transparency, and customise colours
- **Fibonacci Display**: Show/hide internal Fibonacci levels
- **Range Projections**: Enable/disable target projection lines
- **Statistics Display**: Configure table position, size, and appearance
- **Timeframe Selection**: Choose which higher timeframe to scan for patterns

## Conclusion

The Reversal Breakout System is designed to provide traders with a systematic approach to identifying potential reversal points and breakout opportunities. By combining pattern recognition with statistical analysis, this indicator helps you make more informed trading decisions based on historical price behaviour rather than subjective interpretation.

Use this tool alongside your existing trading strategy to enhance your market analysis and potentially improve your trade timing and success rate.