[blackcat] L3 Breakout Indicator

OVERVIEW
This script provides a breakout detection system ([blackcat] L3 Breakout Indicator) analyzing price momentum across timeframes. It identifies market entry/exit zones through dynamically scaled thresholds and visual feedback layers.

FEATURES

Dual momentum visualization: • Price Momentum Ratio Plot (yellow) • Filtered Signal Value Plot (fuchsia)
Adjustable trade boundaries: ▪ Lower Threshold (default: 0.5) ▪ Upper Threshold (default: 2.9) ▪ Central boundary (fixed at 2.0)
Real-time visual feedback: ☀ Buy zone highlights (lime) on momentum crossover ⚠ Sell zone highlights (red) on momentum cross-under ♦ Dynamic convergence area between plots (colored gradient)
HOW TO USE

Interpretation Flow

Monitor momentum plots relative to threshold lines
Actionable signals occur when momentum crosses thresholds
Persistent movement above/below central boundary indicates trend continuation
Key Zones
• Below 0.5: Potential buying opportunity zone
• Above 2.0: Cautionary selling region
• Between 0.5-2.0: Neutral consolidation phase

Optimization Tips

Adjust thresholds based on asset volatility
Combine with volume metrics for confirmation
Backtest parameters using historical data

LIMITATIONS
• Lag induced by 4-period EMA smoothing
• Historical dependency in calculating extremes (lowest(100)/highest(250))
• No built-in risk management protocols (stop loss take profit)
• Performance variability during sideways markets