The Three Line Break, 3LB, is a charting method based on price movements rather than the regular progression of time. It filters out some intermediate price fluctuations to highlight significant price movements.
The chart consists of green bricks during bullish moves and red bricks during bearish moves. A new brick is only formed when the price movement meets the conditions required for its creation; otherwise, no new brick appears.
After a succession of bricks of the same colour, the appearance of a first brick of the opposite colour marks a reversal in the Three Line Break representation. This configuration can be used as a trading signal to identify a potential change in market direction.
The Three Line Break Reversal Indicator allows you to display directly on a candlestick chart the candles corresponding to the appearance of a first green brick or a first red brick in Three Line Break.
You can therefore keep your usual price chart on screen while monitoring reversals detected by the Three Line Break representation, without having to display a separate 3LB chart.
The green and red dots allow you to identify directly on the chart the candles corresponding respectively to the first green bricks and first red bricks.
The indicator can also be displayed in a separate window below the chart. Its Signal Line takes the value 1 when a first green brick appears, -1 when a first red brick appears and 0 when there is no signal. It can also be used to configure an alert in ProRealTime.
The display is live while the candle is being built, so you can see the block being formed before it is validated at the closing.
Many parameters allow you to adapt the display to your own criteria. All settings can be adjusted directly from the indicator's “Configuration” menu in ProRealTime, without modifying the code.
To automatically find stocks forming a first green or red brick, use our Three Line Break Reversal Screener.
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Details of available settings:
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Disclaimer
Our proposed tools (indicators and screeners) are not investment advices but tools allowing everyone to find specific graphic configurations. The automated trading systems offered have been developed and optimised using historical data; however, past performance is no guarantee of future results. Investing in the financial markets involves risks up to and including the total loss of capital. The user of the proposed tools understands and accepts that the use of these tools is under his sole and entire responsibility. P2C Trading declines all responsibility in the use of the tools and the consequences that would result.
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