Linear breakout charts were invented in Japan, they are similar to the Tic-Tac-Toe and Renko charts. One Japanese trader described the three-line breakout chart as follows: “a more appropriate form of tic-tac-toe charts, where reversals are determined by the market, not by the rules of arbitration.”The charts of a linear breakout do not depend on time, they change only when the price changes. These graphs show a series of vertical lines (or “blocks”) of various sizes (Renko graphs use a fixed size). Green blocks (usually white) indicate a price increase, and red blocks (usually black) indicate a price decrease. Prices continue to move in one direction until a reversal is confirmed.
A reversal occurs when the closing price goes beyond the high or low of the” X ” of the previous lines. Usually, the previous 3 lines are taken, but the indicator allows you to use a different number, which gives you more flexibility when analyzing prices. There is a lot of information on the internet about how to build and how to use linear breakout charts.
To view the line breakout chart separately, switch the main chart view to show as a line, and then change the line color to “None” (missing) in the chart properties that are opened by pressing the F8 key. When you change the scale or symbol / timeframe, the indicator will change the size of the blocks on the next tick so that they fit into the viewport of the main chart.
Two input parameters are available:
- Lines-specifies the number of lines to determine the U-turn, by default 3.
- TopBottomBufferPct-specifies the size of the empty space at the top and bottom of the chart (as a percentage of the price range of the displayed blocks). By default, 2.