Quantifiable Broadening Formations [STAT TRADING]

Broadening Formations v4

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OVERVIEW

Automatically identifies and draws Broadening Formations — expanding price structures that reveal where the market is auctioning both higher and lower to find fair value.

This indicator uses a quantifiable, rule-based approach to detect expansion patterns and dynamically tracks the evolution of price ranges in real-time. No subjective drawing required — the indicator handles everything automatically.

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FEATURES

▸ Bar Classification System

Each bar is labeled based on its relationship to the previous bar:

1 = Inside Bar — Range contraction, price stayed within prior bar
2u = Trending Up — Higher high AND higher low
2d = Trending Down — Lower high AND lower low
3 = Outside Bar — Expansion, higher high AND lower low in single bar
C3 = Composite 3 — Multi-bar expansion pattern (2d→2u or 2u→2d completing the range)

Color coding helps identify conviction:
• Green = Bullish structure with bullish close
• Red = Bearish structure with bearish close
• Orange = Conflicted (structure and close disagree)
• Yellow = Outside Bar (3)
• Purple = Composite 3 (C3)

▸ Automatic Formation Detection

The indicator detects when price proves it can take both sides of a range, then:
• Draws dynamic upper and lower boundary lines
• Extends lines forward as projected support/resistance
• Updates the formation in real-time as price makes new highs or lows
• Detects breakouts when price closes through boundaries with conviction

▸ Support/Resistance Test Dots

Visual markers show when price tests the formation boundaries:
• Red dot at high = Price wicked into upper resistance but closed below (failed test)
• Green dot at low = Price wicked into lower support but closed above (held support)

These dots help you see where the market is probing the boundaries before a decisive move.

▸ Breakout & Reclaim Detection

Clear labels mark key events:
• BREAKOUT ↑ = Close above upper boundary (bullish break)
• BREAKOUT ↓ = Close below lower boundary (bearish break)
• RECLAIM ↑ = Failed breakdown, price recovered back into range
• RECLAIM ↓ = Failed breakout, price fell back into range

Reclaims are powerful signals — failed breakouts often lead to strong moves in the opposite direction. The formation automatically expands to include the failed move.

▸ Sub-Formations (Internal Triangles)

White lines show nested formations within larger structures. These internal patterns can provide earlier signals before the major formation resolves.

Sub-formations only appear when they are truly internal to the parent (not touching parent boundaries).

▸ Formation Labels

Each formation is labeled at its trigger point:
• 3 = Triggered by outside bar
• C3 = Triggered by composite pattern
• R1, R2... = Number of reclaims (e.g., "3 R2" = outside bar trigger with 2 reclaims)

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SETTINGS

Show Bar Classification Labels Display 1/2u/2d/3/C3 below each bar
Detect Composite 3s Identify multi-bar expansion patterns
Show Sub/Internal Formations Display nested formations in white
Show Support/Resistance Test Dots Mark boundary tests with colored dots
Show Breakout/Reclaim Labels Label breakouts and reclaims
Major BF Line Color Color for primary formation lines
Sub BF Line Color Color for nested formation lines
Line Width Thickness of formation lines
Bars to Project Forward How far to extend lines into the future

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ALERTS

Set alerts for key events:

• Outside Bar (3) — Single-bar expansion detected
• Composite 3 (C3) — Multi-bar expansion pattern detected
• New BF Started — New broadening formation triggered
• BF Break — Price closed through formation boundary
• BF Reclaim — Failed breakout, formation continues with expanded range

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HOW TO USE

Understand your position:
Are you near the upper boundary, lower boundary, or mid-range? Context matters.

Watch for closes, not wicks:
Wicks test levels. Closes show conviction. The indicator only triggers breakouts on closes through the boundary.

Pay attention to reclaims:
A break that fails and reclaims often leads to an aggressive move the other direction. The "R" count on the label shows how many times this has happened.

Use test dots for entries:
Multiple red dots at resistance followed by a green bar = potential short setup. Multiple green dots at support followed by a red bar = potential long setup.

Sub-formations give early signals:
When an internal triangle breaks, it can front-run the larger formation's move.

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NOTES

• Works on all timeframes and instruments
• Lines update dynamically as new bars form
• Historical formations are preserved on the chart
• Composite 3s (C3) are shown in purple to distinguish from single-bar triggers
• Best used to understand current market structure — combine with your existing strategy for entries


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Objective structure. No guesswork.

p.s This is a public version in a different language than our true BF identification algorithm. There will be some bugs and it is unlikely we will fix it in the near future.